In this article, we discuss 13 best metaverse stocks to buy now. If you want to skip our detailed discussion on the metaverse, head directly to 5 Best Metaverse Stocks To Buy Right Now.
The global metaverse market was valued at $98.7 billion in 2023, and it is anticipated to grow significantly, reaching $1,402.5 billion by 2032. IMARC Group predicts a compound annual growth rate (CAGR) of 34.29% during the forecast period of 2024-2032. Factors supporting this growth include advancements in virtual reality (VR), augmented reality (AR), blockchain, and cloud computing. Additionally, increased user interest in immersive digital experiences, online gaming, social media platforms, enhanced internet connectivity, and a growing desire for personalized experiences contribute to the metaverse’s expansion. Tarik Chebib, Capital.com’s chief revenue officer, told Reuters:
“The internet will end as we know it and the metaverse will totally reshape the global economy.”
The gaming industry, with its widespread use of alternative realities in games like Fortnite and Roblox, is poised to play a pivotal role in the metaverse, according to Tarik Chebib. Given the global user base of 3.2 billion gamers, there is substantial potential demand for the metaverse revolution. Furthermore, the gaming sector contributes valuable software expertise to serve as the foundation for metaverse development. The primary deficiency lies in hardware, as per Chebib, who emphasized the necessity for a streamlined solution that doesn't require users to wear bulky headsets for participation. The gaming sector is expected to be a significant beneficiary of the metaverse's growth, projected to represent around half of the market by 2024, totaling $400 billion. Major players in this domain include Epic Games, Roblox, and Microsoft, which strengthened its position with the acquisition of Activision Blizzard, creators of Call of Duty, for a historic $69 billion. Microsoft's leadership in the industry, particularly with titles like Minecraft, suggests a trend where other companies may follow suit. Chebib further commented:
“Video games help us visualize what the metaverse could look like. Gaming companies are really interesting cases as they have already created worlds where people buy skins, avatars and collect different things.”
2022 was expected to be the year of the metaverse, marked by Facebook's transformation to Meta in October 2021, reflecting Mark Zuckerberg’s enthusiasm for the potential of virtual and augmented reality. However, this did not materialize, and in 2023, the metaverse took a backseat to artificial intelligence. However, in 2024, there is potential for a metaverse resurgence in public attention as Apple launched its $3,500 Vision Pro headset, announced midway through 2023. Speculation suggests it could have a transformative impact on the metaverse similar to what the iPhone did for smartphones and the iPad did for portable tablet computing.
Some of the best metaverse stocks to invest in include Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and NVIDIA Corporation (NASDAQ:NVDA).
Our Methodology
We assessed the total holdings of the Roundhill Ball Metaverse ETF (NYSE:METV) and chose the top metaverse stocks based on overall hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 910 elite hedge funds tracked as of the end of the third quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
PayPal Holdings, Inc. (NASDAQ:PYPL) is a technology company facilitating digital payments globally for both merchants and consumers. On February 7, PayPal Holdings, Inc. (NASDAQ:PYPL) reported a Q4 non-GAAP EPS of $1.48 and a revenue of $8 billion, outperforming Wall Street estimates by $0.12 and $130 million, respectively. In the fourth quarter of 2023, the number of payment transactions rose by 13%, reaching 6.8 billion, while the total payment transactions for the fiscal year 2023 increased by 12% to 25 billion. Despite that, active accounts decreased 2% year-over-year, amounting to 426 million.
According to Insider Monkey’s third quarter database, 78 hedge funds were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL), compared to 86 funds in the prior quarter. Gavin Baker’s Atreides Management is a prominent stakeholder of the company, with 4.17 million shares worth $244 million.
Like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and NVIDIA Corporation (NASDAQ:NVDA), PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the best metaverse stocks to monitor.
Wedgewood Partners stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its fourth quarter 2023 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL) also contributed less to portfolio performance than most holdings during the fourth quarter. The total payment volume handled by PayPal during its most recent quarter grew +15%, which helped drive healthy revenue growth and +20% earnings per share growth. Critically, the Company’s new management team has significant opportunity to drive more revenue and earnings growth across the massive, multi-trillion-dollar payments addressable market. PayPal’s rapidly growing payment processing brand, Braintree, represents one of those revenue growth opportunities, either by raising prices, as the Company had previously used a low-price strategy to establish a beachhead in this market, or by adding value-added services. PayPal’s branded checkout remains the largest volume and profit driver for the business, and we expect this to continue to track in-line with e-commerce growth in the near term, and eventually take share as the Company rolls out new features to its over +400 million users and +30 million merchants. We added to our position with the stock trading at just 10X forward earnings estimates during the quarter because there are many more long-term growth opportunities relative to most financial companies that trade for similar multiples and compared to technology companies that trade for much higher multiples.”
Broadcom Inc. (NASDAQ:AVGO) is a global semiconductor company specializing in the design and supply of semiconductor devices. It operates in two segments – Semiconductor Solutions and Infrastructure Software. It is one of the best metaverse stocks to invest in. On December 7, Broadcom Inc. (NASDAQ:AVGO) reported a Q4 non-GAAP EPS of $11.06 and a revenue of $9.3 billion, outperforming Wall Street estimates by $0.10 and $20 million, respectively.
According to Insider Monkey’s third quarter database, 87 hedge funds were long Broadcom Inc. (NASDAQ:AVGO), compared to 72 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with a position worth $1.70 billion.
ClearBridge Multi Cap Growth Strategy made the following comment about Broadcom Inc. (NASDAQ:AVGO) in its Q2 2023 investor letter:
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology.
The Walt Disney Company (NYSE:DIS) is a global entertainment company with three segments – Entertainment, Sports, and Experiences. On February 8, The Walt Disney Company (NYSE:DIS) declared a $0.45 per share semi-annual dividend, a 50% increase from the prior dividend of $0.30. The dividend is payable on July 25, to shareholders of record as of July 8.
According to Insider Monkey’s third quarter database, 89 hedge funds were bullish on The Walt Disney Company (NYSE:DIS), compared to 92 funds in the preceding quarter. Nelson Peltz’s Trian Partners is the largest stakeholder of the company, with 32.8 million shares worth $2.66 billion.
Madison Sustainable Equity Fund made the following comment about The Walt Disney Company (NYSE:DIS) in its Q3 2023 investor letter:
“During the quarter, we sold our positions in Bristol-Myers Squibb and The Walt Disney Company (NYSE:DIS). The Walt Disney Company is facing a difficult and uncertain transition in its core media business assets including the ESPN business and other linear media assets. These media assets are cash generative but face secular decline as consumers are cutting their expensive cable subscriptions and moving to alternative streaming options. This has resulted in a decline in operating profits for the media division. The media business has long-term fixed costs related to its sports broadcasting agreement with multiple sports leagues which will further pressure profits during this transition.”
10. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 107
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is engaged in the manufacturing, packaging, testing, and sale of integrated circuits and semiconductor devices globally. It is one of the top metaverse stocks to watch. On February 7, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) reported a revenue of approximately NT$215.79 billion for January, showing a 7.9% increase from January 2023 and a 22.4% rise from December. TSMC also recently announced plans to construct a second chip fabrication facility in Japan in collaboration with Sony, Denso, Toyota, and the Japanese government.
According to Insider Monkey’s third quarter database, 107 hedge funds were bullish on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), compared to 121 funds in the last quarter. Jean-Marie Eveillard’s First Eagle Investment Management is a significant position holder in the company, with a stake worth $780.3 million.
Wedgewood Partners stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its fourth quarter 2023 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was also a top contributor to performance. The Company began shipping chips that were fabricated using its industry-leading “N3″ node. Nearly all of the Company’s N3 capacity has been filled by high-end chip designers such as Apple, NVIDIA and even Intel. As high-performance computing, particularly related to AI in both data centers and edge devices, continues to build momentum, the Company will be a key supplier for many years to come. Despite the boom-and-bust cycle in demand seen for many semiconductors during Covid-19 and post-Covid-19, the Company should be able to post solid double-digit growth next year as inventories and end-market demand across most of its technology nodes get back to normal levels. The Company also maintains dominant market share in leading-edge nodes, which is in short supply, given the difficulties its competitors have had in scaling up EUV-based manufacturing. The Company has been able to secure higher prices because of this and can still generate excellent returns on elevated capital expenditures necessary for this scarce capacity. The Company is arguably one of a handful of the world’s most important and largest companies, but because the Company’s shares trade as an ADR (American Depositary Receipt) the shares are not part of the major stock market indices in the U.S. As a result, the shares are woefully under owned by U.S. investors (institutional and individual), particularly for a company that regularly generates cash flow return on invested capital in excess of +40%. Therefore, our growing position in these shares represent a significantly relatively overweight portfolio position versus our peers and benchmarks. We could not be more pleased by this anachronistic institutional imperative.”
Alibaba Group Holding Limited (NYSE:BABA) offers technology infrastructure and marketing services to enable engagement between merchants, brands, and businesses with users and customers worldwide. It is one of the best metaverse stocks to buy. On February 7, Alibaba Group Holding Limited (NYSE:BABA) reported a Q3 non-GAAP EPADS of $2.67 and a revenue of $36.67 billion, outperforming Wall Street estimates by $0.03 and $270 million, respectively. Alibaba announced that its board has authorized a $25 billion expansion of its stock buyback program until the end of March 2027. The company now has $35.3 billion remaining for share repurchases over the next three fiscal years.
According to Insider Monkey’s third quarter database, 110 hedge funds were bullish on Alibaba Group Holding Limited (NYSE:BABA), compared to 112 funds in the preceding quarter.
L1 Long Short Fund made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2023 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) (Long -18%) shares weakened in recent months as Chinese reopening strength faded and macro-economic data points began sequentially declining. Nevertheless, we believe the Chinese government will use consumption as a key lever to reinvigorate the economy post-COVID lockdowns. Alibaba remains a high-quality business with leading positions in both eCommerce and Public Cloud, and management is taking proactive steps to unlock shareholder value. It has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media, and Entertainment Group. Each group will be managed independently, with a separate CEO and board, have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this restructure will be a strong positive catalyst to unlock the sum-of-the-parts valuation upside in the company.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company operating in the Data Center, Client, Gaming, and Embedded segments. The company provides x86 microprocessors, graphics processing units, and other related products and services. Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the best metaverse stocks to monitor.
On February 1, Advanced Micro Devices, Inc. (NASDAQ:AMD) increased its guidance for artificial intelligence-related revenue, projecting $3.5 billion in sales for the current year, up from the previous estimate of $2 billion. Citi analyst Christopher Danely suggested that AMD might be intentionally underestimating the revenue and there are indications that the actual figures could exceed the projections. Danely estimates that AMD might generate $5 billion this year and $8 billion next year from the MI300, a product associated with artificial intelligence.
According to Insider Monkey’s third quarter database, 110 hedge funds were long Advanced Micro Devices, Inc. (NASDAQ:AMD), compared to 112 funds in the prior quarter. Philippe Laffont’s Coatue Management is a prominent stakeholder of the company, with 12.4 million shares worth $1.28 billion.
White Falcon Capital Management stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth quarter 2023 investor letter:
“It is important to note that the returns depicted above actually originated in the market turmoil of 2022 and were only realized in 2023. We assess that about 75% of the returns in 2023 were derived from just 35% of the portfolio. Notably, the technology companies we acquired in 2022 – Advanced Micro Devices, Inc. (NASDAQ:AMD), Amazon, Docebo, NU, Rover – performed exceptionally well. In hindsight, the decision to allocate to technology stocks appears straightforward; but it actually demanded courage and conviction to buy and add to these stocks during the fear and uncertainty of the 2022 bear market.
Adobe Inc. (NASDAQ:ADBE) ranks 7th on our list of the best metaverse stocks to invest in. Adobe Inc. (NASDAQ:ADBE) is a global software company operating in three segments – Digital Media, Digital Experience, and Publishing and Advertising. On December 18, Adobe and Figma jointly announced the cancellation of their $20 billion merger due to increasing regulatory challenges globally. The companies stated that they see no clear path to obtaining necessary approvals from the European Commission and the UK Competition and Markets Authority. In light of the terminated deal, Adobe will pay Figma the agreed-upon $1 billion termination fee. Following this development, Barclays upgraded Adobe Inc. (NASDAQ:ADBE) stock to Overweight, citing reduced concerns over dilution.
According to Insider Monkey’s third quarter database, 112 hedge funds were bullish on Adobe Inc. (NASDAQ:ADBE), compared to 109 funds in the prior quarter.
Here is what Polen Global Growth has to say about Adobe Inc. (NASDAQ:ADBE) in its Q3 2023 investor letter:
“Both Alphabet and Adobe’s businesses continue to perform well. With respect to Adobe, the most recent quarter delivered more of the same with constant currency revenue growing 13%, margin expansion, and over 2% of shares outstanding repurchased for non-GAAP earnings growth of over 20%. We believe its approach to GenAI through Firefly, which guarantees safe content because it trains on Adobe Stock, will continue to be attractive to enterprises. The counter to GenAI, and something we are keeping an eye on with Alphabet and Adobe, is that it requires heavy investment. While both businesses can leverage their scale and manage costs in other areas, we expect the investment in future growth through GenAI will weigh on company-wide margins over the near term.”
Apple Inc. (NASDAQ:AAPL) has shown an increased commitment to the metaverse with the recent announcement of its first mixed-reality headset, the Apple Vision Pro. The headset provides users with virtual and augmented reality experiences, offering a gateway to a version of the metaverse. It features Apple's metaverse-style operating system, VisionOS, emphasizing spatial computing. The launch signals Apple's strategic move into the extended reality (XR) landscape. Apple Inc. (NASDAQ:AAPL) is one of the best metaverse stocks to watch.
According to Insider Monkey’s third quarter database, 134 hedge funds were long Apple Inc. (NASDAQ:AAPL), compared to 135 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with 915.5 million shares valued at $156.75 billion.
In addition to Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and NVIDIA Corporation (NASDAQ:NVDA), Apple Inc. (NASDAQ:AAPL) ranks 6th on our list of the best metaverse stocks to invest in.
Bireme Capital stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2023 investor letter:
“We also shorted Apple Inc. (NASDAQ:AAPL) in Q3. At our average price of around $190 per share, Apple traded at 30x peak earnings and a $2.8 trillion market cap. While Apple is indeed a magnificent company, this valuation is simply too rich for a business with a substantial cyclical component. The company is projected to grow revenue at a mere 4% rate between 2022 and 2026. We think the total return on Apple stock will be lower than the market, and especially our long positions, over the next few years.”
