Stocks to buy

At one point, the metaverse was the talk of the town. Companies like Meta Platforms (NASDAQ:META) spent billions of dollars on its development only to watch it fizzle and fade. However, don’t be so quick to write off the digital world just yet. With the help of artificial intelligence, the metaverse could get a second chance, as can these stocks for metaverse revival. For instance, Apple (NASDAQ:AAPL) is essentially making its way into the metaverse with its Vision Pro product, which offers an immersive 4K display.

Even Nike (NYSE:NKE) just announced its teaming with Fortnite to build its metaverse presence. Motown is jumping into the metaverse, too. “The collaboration includes the launch of Motown Records, a new immersive music experience and venue in Second Life that will be the home to in-world appearances by top classic and contemporary Motown artists,” reads a Second Life press release. That being said, some of the stocks for metaverse revival include:

Stocks for Metaverse Revival: Roblox (RBLX)

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With a mission to build a human co-experience platform that enables billions of users to come together to play, learn, communicate, and explore, Roblox (NYSE:RBLX) is one of the top metaverse stocks to consider. Analysts at Canaccord like the stock here, too. In fact, Jason Tilchen just initiated coverage with a buy rating with a $48 price target.

While the company started as a gaming hub for kids, it has quickly evolved to become a leading destination for immersive gaming, noted the firm. Helping, the company announced positive sales numbers. Bookings, for example, were up 23% year over year through April. Users also spent about 14.5 billion hours interacting with RBLX content. While the company still operates at a loss, it does expect to see improvements as it gains scale.

Even better, in May, Benchmark analysts upgraded the RBLX stock to a buy rating. Roth MKM upgraded RBLX to a buy. Barclays raised its price target to $32 from $28, with BTIG raising its price target to $60 from $55.

Unity Software (U)

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After getting trounced in 2022 and part of this year, Unity Software (NYSE:U) is showing big signs of life again. In fact, after finding strong support, around $25.20, the stock bounced to $45.07. Unfortunately, at $45, it’s running into heavy resistance and likely to pivot lower. But don’t write it off just yet. In fact, I’d use any dip in this stock as an opportunity.

For one, it has a dominant position in the metaverse, as noted by InvestorPlace contributor Muslim Faroque. “Its platform is essentially a toolbox for developers to build immersive 3D environments, a cornerstone of the metaverse. Unity’s widespread use and potential for growth in the burgeoning metaverse market make it a noteworthy contender for investors.”

Two, as the metaverse shows signs of life again, so should Unity. Three, earnings have been solid. In May, the company beat expectations on revenue and raised its full-year revenue forecast. For the quarter, Unity’s revenue jumped to $500 million, as compared to estimates for $480 million. Better, it expects to post revenue of $510 million to $520 million in the second quarter, which is above expectations of $509 million.

Plus, Apple is working with Unity Software to bring 3D apps to its headset, as noted by Investing.com – a move Piper Sandler analysts said could reinforce Unity as “a developer platform of choice for 3D applications.”

Global X Metaverse ETF (VR)

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While those two stocks should do well with a metaverse emergence, you can diversify further – at less cost with an ETF. For example, look at the Global X Metaverse ETF (NASDAQ:VR). Since Jan., the ETF exploded from about $18 to $25. While it’s technically overbought and likely to see profit-taking, I’d use any dips in the VR ETF as an opportunity to back up the truck.

That’s because the VR ETF doesn’t just have exposure to the metaverse but also to the artificial intelligence boom. With an expense ratio of 0.50%, the ETF invests in companies involved with the metaverse (no kidding, right), semiconductors, cloud computing, and 5G, for example.

However, as I noted, there’s a crossover from the AI boom, too, with holdings in Nvidia (NASDAQ:NVDA), Meta Platforms, Apple, Amazon.com (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT), to name a few of the giants.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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