We recently compiled a list of the 10 Best Metaverse Stocks To Buy According to Hedge Funds.In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against the other Best Metaverse Stocks to Buy According to Hedge Funds.
What is the Metaverse?
According to McKinsey & Company, the metaverse is the emerging 3-D-enabled digital space that uses virtual reality, augmented reality, and other advanced internet and semiconductor technology to allow people to have lifelike experiences online.
The basic features of the metaverse include a sense of immersion, real-time interactivity, and user agency. Whereas, the full vision of the metaverse encompasses platforms and devices that work seamlessly with each other, the possibility for thousands of people to interact simultaneously, and use cases well beyond gaming. While the phenomenon gained attention in 2021 with internet searches for the term increasing by 7,200%, it seems here to stay. With lockdowns and work-from-home policies in place, the interest in shared virtual environments spiked. The opportunity remains vast with metaverse having the potential to generate up to $5 trillion in value by 2030.
Is the Metaverse Still Alive?
When the tech guru Mark Zuckerberg changed Facebook’s name to Meta in 2021, he clearly drove the metaverse narrative in the world. Although the vision of a digital future of work and recreation became a buzz for a while, other emerging technologies such as Artificial Intelligence decided to dominate the headlines later.
Questions regarding whether Zuckerberg should have transformed a successful social media company into a VR venture have also been asked. In September 2023, BBC reported that his company’s virtual and augmented reality branch, Reality Labs, has lost $21 billion since the prior year. The firm later introduced its social virtual reality space Horizon Worlds. While some users have complained about not having enough people to make it fun, the platform’s monthly users can simply not match the number of people who consume social media like Facebook and Instagram every day.
Although the company’s virtual reality headset and its Horizon Worlds have not gone mainstream after 3 years of the company’s founding, experts argue that the metaverse is still as relevant as ever. On October 2, CNBC reported that Zuckerberg’s metaverse is finally showing signs of life as his company might have found its footing in VR and AR through a different medium, smart glasses. After the firm witnessed early success in the market for smart glasses via a partnership with Ray-Ban, the CEO unveiled the first “fully-functioning” prototype AR glasses, Orion, in September.
“The right way to look at Orion is as a time machine. These glasses exist, they are awesome and they are a glimpse of a future that I think is going to be pretty exciting.”
Although there might be a lack of connection between the metaverse which was the next big thing two years ago and the prevailing tech landscape dominated by AI, some argue that the reports of the metaverse’s death are ‘exaggerated’ and that it is a rather long-term concept to materialize as a digital future for masses.
With that being said, let’s move to the 10 best metaverse stocks to buy according to hedge funds.
Our Methodology:
In order to compile a list of the 10 best metaverse stocks to buy according to hedge funds, we first used stock screeners, ETFs, and online rankings to make an extended list of the relevant companies. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best metaverse stocks to buy according to hedge funds have been arranged in ascending order of their hedge fund holders as of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Meta Platforms, Inc. (NASDAQ:META) formerly the Facebook company, builds the future of human connection and the technology that makes it possible. The firm has moved beyond 2D screens and into immersive experiences in the metaverse to help create the next evolution of social technology. It has two reportable segments, the ‘Family of Apps’ including Facebook, Instagram, Messenger, WhatsApp, and other services, and the ‘Reality Labs’ which includes its virtual, augmented, and mixed reality-related consumer hardware, software, and content.
Mark Zuckerberg embraced the metaverse by changing his company’s name from Facebook to Meta, with a focus on bringing the metaverse to life and helping people connect, find communities, and grow businesses. The Meta Quest headsets enable amazing new VR worlds to witness. Users can experience mixed reality like never before with the world’s best library of mixed reality and immersive experiences on the most recent Meta Quest 3S. Simultaneously, Meta has introduced the Meta Horizon Worlds, a VR platform for immersive social experiences where one can explore, play, and create together.
Meta Platforms, Inc. (NASDAQ:META) closed the third quarter with total revenue of $40.59 billion, up 19% year-over-year. Apart from experiencing the rapid adoption of Meta AI and Llama, Meta achieved milestones related to Reality Labs and the integration of AI and wearables. These include experiencing a strong demand for Ray-Ban Meta glasses, the introduction of its first full holographic AR glasses Orion, and the release of its newest Quest 3S. Overall, the firm is witnessing strong product and business momentum.
As of 2024’s second quarter, the company is held by 219 hedge funds. With a strong vision focused on the metaverse and the significant progress the firm has made to make the metaverse a reality, Meta Platforms, Inc. (NASDAQ:META) is a promising metaverse stock to invest in.
Overall META ranks 2nd on our list of the other Best Metaverse Stocks to Buy According to Hedge Funds. While we acknowledge the potential of META as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
