Despite taking a backseat to artificial intelligence (AI), metaverse stocks to buy are still tantalizing options for investors. These companies present intriguing investment opportunities despite the polarizing debate surrounding the underlying technology. However, based on the lofty growth projections, it’s tough to pass up on them.
Metaverse market forecasts are all over the place but the consensus points to upwards of 25% growth through 2031. These projections make it one of the fastest-growing industries, and those involved in the space are set to rake in millions. Moreover, HSBC (NYSE:HSBC) recently launched a fund to capitalize on metaverse opportunities, targeting high-ticket clients in Hong Kong and Singapore.
Roblox (RBLX)
Roblox (NYSE:RBLX) is one of the “OG” metaverse plays, enabling its massive user base to create and engage in virtual worlds. Despite strong improvements in core metrics post-pandemic, its shareholders continue to lose money. It’s down more than 60% in the past three years and roughly 28% year-to-date (YTD).
Most recently, its stock nosedived following lackluster second-quarter (Q2) guidance and a reduced forecast for FY 2024 bookings. Issues with the performance of its application and content delivery hiccups impacted booking growth. However, its management has presented plans to tackle these problems. Moreover, first-quarter (Q1) results came in strong despite operating in an unconducive market environment. Sales were up 22% year-over-year (YOY) to $801.3 million, while average daily active users (DAUs) were at 77.7 million, up 17% YOY.
Furthermore, the firm is looking to significantly upgrade its platform and tools for creators. Some of these additions include the powerful Immersion Mode for a better virtual reality experience, advanced haptic controls and major avatar and marketplace improvements.
Immersion (IMMR)
Immersion (NASDAQ:IMMR) develops advanced haptic technologies, offering tactile feedback in virtual environments such as the metaverse. The stock has plenty of momentum, with over a 50% total return in the past six months. A lot of the buzz surrounding the stock is linked to the appointment of its new CEO, Eric Singer.
Singer’s background as an activist, and with a healthy track record of enhancing shareholder wealth, have been major catalysts for the stock. Share buybacks and dividend increases have been a key focus for Singer over the years, making IMMR stock one of the hottest to own at this time.
Last year was a massive year for its shareholders, with it returning $15.7 million in shareholder rewards. According to Singer, the efforts to strategically allocate capital, renew licensing deals and enforce intellectual properties led to an excellent 2023.
Moreover, the fruits of his labor were on full display in Q1, when the firm delivered a staggering $43.9 million in sales, 520% higher on a YOY basis. Additionally, it ended the quarter with zero debt and upwards of $179 million in its cash till.
Meta Platforms (META)
No metaverse stocks to buy list is complete without Meta Platforms (NASDAQ:META), arguably the biggest catalyst for propelling the technology to the next frontier. However, in a year or so, it shifted its focus towards belt-tightening measures and building its competitive edge in AI. The strategic shift led to a 69% YOY increase in net income last year to a whopping $39 billion.
It has kept up the pace so far in 2024, with a better than 17% increase in net income on a trailing 12-month (TTM) basis compared to last year. Net income more than doubled in Q1, but relatively weak guidance for the second quarter (Q2) sent shares tumbling by 15%. Moreover, it lost $3.83 billion in Q1, taking its total losses to over $45 billion since the end of 2020.
Hence, Meta is still losing a lot on its metaverse endeavors but it’s unlikely to hold back. Last year it made a truckload of cash and will continue pumping that money into its CEO’s metaverse dream. Given Mark Zuckerberg’s view of the metaverse as the internet’s next chapter, it’s unlikely that Meta will pull back anytime soon.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines