When analysts write about the metaverse, it’s not uncommon for it to be in a derisive tone. The fact that we’re not all strapped into virtual reality (VR) headsets with our families at home indicates its failure. The truth is the metaverse is already here.
Just like Bitcoin (BTC-USD) isn’t considered a failure due to the continued existence of central banks, taking the metaverse to the extreme is not the only measure of its success. The metaverse encompasses many technologies and user experiences, so its evolution doesn’t necessarily hinge on everyone adopting virtual reality headsets overnight.
The metaverse should be understood as an emergent concept, not a normative destination that determines its success or failure. It’s also perhaps inevitable that we are heading towards a future where virtual experiences and real life will continue to be closely intertwined, thus making the metaverse more evident for all.
So, for those bullish on the metaverse’s continued rise, read on. Here are the best metaverse stocks to consider.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is likely the first company that investors think of when the idea of the metaverse comes to mind. Recently, the company has recovered from its post-pandemic losses, with its stock price surging 174.09% over the past year.
Much of this recovery was due to the bullishness of the market’s reaction to META’s AI investments and not solely due to its metaverse investments. Namely, CEO Mark Zuckerberg’s commitment to building a “massive compute infrastructure” for AI products and the company’s record-high revenues in the previous year’s third quarter gave some buoyancy to its stock price.
Yet, META is still firmly committed to growing its metaverse products, too. Its initiatives include developing the Quest headset and Ray-Ban smart sunglasses and creating a virtual 3D interactive space called Horizon Worlds.
Analysts predict that META’s EPS will grow 21.19% in FY2024 and 21.19% growth for its top line. That, then, makes it one of those metaverse stocks to consider.
Roblox (RBLX)
Roblox (NYSE:RBLX) is a lesser-known metaverse stock compared to META, but it still ticks all the boxes, which could make it an industry leader in the not-too-distant future. For one, Roblox is an immensely popular game amongst children and teenagers, with its own virtual worlds, economy and culture centered around Robux.
In recent times, RBLX pivoted its ecosystem from just being seen as a game for kids to include older users and adults, too.
The pivot may have worked in the company’s favor, as its revenues increased 37.77% last quarter, and free cash flow stood at $59.51 million, up from an $82.53 million loss in the prior quarter.
Looking ahead, Wall Street is bullish on the platform’s prospects. The company is rated a Buy, and analysts predict a potential 35.9% upside on the high end.
Snap (SNAP)
Snap (NYSE:SNAP) is another metaverse stock that investors have been too quick to give up on in the past and were duly proven wrong. The company’s share is up 66.77% over the past year.
As reported by Forbes, Snap reported a 12% year-over-year increase in average daily active users. That brought its total to 406 million in the third quarter of 2023. The bigger picture, though, is that in the same quarter, Snap surpassed street estimates with total revenues of $1.19 billion, up 5% year-over-year. Its net income losses also tightened to $1.07 billion.
SNAP is predicted to have a huge year for FY2024 and beyond. Analysts predict its EPS will surge by an incredible 135% and then surge again in FY2025 by 121.8%. That would bring its EPS to 33 cents, a massive increase from its 6 cents per share at the time of writing.
The EPS increase will likely lead to a further upside in its share price. Incredibly, 47 analysts rated SNAP, and the average price target is $288.82. For some context, the company’s share trades at just $16.61 at the time of writing. That’s a 1,638.83% implied upside.
With forecasts like these, SNAP is surely one of those metaverse stocks investors should consider.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.