Meet the Two Companies Replacing the Internet
I’m sure the metaverse seems odd to some of you.
Virtual reality business meetings? Weddings attended only by (ugly) computer generated avatars? Million-dollar real estate in a fake world? All that sounds like it’s straight out of an ’80s sci-fi novel.
But, it doesn’t matter how you feel about it. The metaverse is coming and investing in its building blocks will take you far. How do I know? Because I lived through and passed up the golden opportunities preceding the Dot Com Boom.
Back then, I thought the internet was cool, but I never thought it would take off. Or that I’d ever even use it. Now look where we are. Technology, software as a service, and ecommerce are some of the biggest most profitable industries on the markets.
And as they rose to prominence, the companies that built their foundations became filthy rich.
So, let me be the first to say that you don’t want to shrug off the metaverse and let these two companies leave you behind.
Building with Data
The metaverse will be built on unfathomable amounts of data to recreate and augment our reality.
Everything from a single blade of grass blowing in the wind to the sight and sound of a crowded city street will be rendered in three dimensions with such detail that it may look as real as my home office.
To create an entire world in that much detail requires data. Data that has to be created and stored in the physical word, then rendered and exported to phones, VR headsets, laptops, and TVs in every second of everyday for the rest of time.
The only way that will be possible if with large, efficient data centers – and companies in the know are already making moves to create the very kind needed to run the metaverse.
Bloomberg Intelligence reports data center spending will reach $800 billion by 2023. Before the end of the decade, they expect that investment will be above $2.5 trillion. The biggest driver of data center growth will be about building the metaverse.
There are lots of data center companies worth your investment capital, but two in particular that stand heads and tails about the rest.
One of them is Microsoft Corp (Nasdaq: MSFT).
Mr. Softy is on the cutting edge of the metaverse, owning and operating some of the world’s best data centers for its affiliate Azure, with plans to grow even larger.
The company is also gunning for metaverse accessible technology with its HoloLens headsets, which are already being used in conjunction with Teams to create a “meeting metaverse.”
Then there’s the matter of competition. Amazon and Google are both facing antitrust investigations around the world, threatening their business. Luckily, Mr. Softy passed that weigh station years ago. It’s full sail ahead to be a $2.57 trillion market cap company.
Microsoft has always been one of my favorite companies, in the world, and I’ve been recommending it for decades now, but the last 10 years have been double-down time for me on Microsoft.
With over $175 billion in annual revenue and a profit margin of 31.51% the company practically mints money. The more than $130 billion in cash, and piling higher every day, ensures it will have all the money it needs to build hundreds and thousands of new data centers which will all serve as indispensable infrastructure building blocks and running gears for the metaverse.
I’d buy Microsoft here and hold it as long as there’s going to be a need for data and the metaverse takes over the real world.
There’s another data center play worth getting into right now. And as far as data centers driving the metaverse, this one’s a pure play.
Equinix Inc. (Nasdaq: EQIX) is the largest data center real estate investment trust (REIT) by market cap in the world. The company boasts 227 data centers globally, representing 1,350 megawatts and 311,000 cabinets of power capacity. Equinix’s houses its servers in 26.4 million square feet of centers in 26 countries and supports 10,000 customers, two and a half times as many as its nearest REIT data center competitor.
The data center giant’s funds from operations are now $22.60 per share, up 65% in five years – and with the metaverse they may rise even farther.
By investing in companies like these, you’re not just investing in tech infrastructure. You’re investing in the future. Yours and the metaverse’s.
Go get ’em.