In this article, we will take a look at the 5 best metaverse stocks to invest in. To see more such companies, go directly to 11 Best Metaverse Stocks To Invest In.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 135
Earlier this year, it was reported that Apple was working on a “mixed reality” AR headset which will allow users to have an immersive experience when using games, apps and software. According to Bloomberg, the headset will likely be named Reality Pro and could have a price tag of $3,000.
The device could be launched in June this year. The launch could cause metaverse developers to roll out several apps and games for Apple Inc. (NASDAQ:AAPL)’s headset, increasing Apple’s footprint in the industry.
As of the end of the fourth quarter of 2022, 135 hedge funds tracked by Insider Monkey had stakes in Apple Inc. (NASDAQ:AAPL). The biggest stakeholder of Apple Inc. (NASDAQ:AAPL) is Warren Buffett’s Berkshire Hathaway which owns an $116 billion stake in the company.
Here is what ClearBridge All Cap Growth Strategy has to say about Apple Inc. (NASDAQ:AAPL) in its Q1 2023 investor letter:
“Reminiscent of the FAANG period of market leadership in recent years, performance was concentrated in a handful of the largest growth stocks in the benchmark. For example, Apple (NASDAQ:AAPL), Microsoft (MSFT) and Nvidia (NVDA) were responsible for close to half its total return (6.47%). Despite the Russell 3000 Growth Index losing nearly 29% in 2022 and underperforming its value counterpart by 2,100 bps, the benchmark remains extremely concentrated (Apple and Microsoft alone account for 22.4% of the index). Meanwhile, a tighter financing environment created by the Fed’s aggressive rate hike campaign, and worsened by the March failure of Silicon Valley Bank and Signature Bank (OTC:SBNY), hurt small cap companies the most (Exhibit 1) while health care stocks also trailed due to higher funding costs.
Despite limited mega cap exposure, the ClearBridge All Cap Growth Strategy held its own through the shift in market leadership. The combination of underweights to Apple and Microsoft, as well as the reclassification of payment providers PayPal (PYPL) and Visa (V) from IT to financials, caused the Strategy to finish the quarter close to 550 bps underweight IT. While diversification goals limit the Strategy from maintaining market weights in the index’s largest components, our positioning also reflects caution as we anticipate further multiple compression and earnings pressure among IT and shadow tech stocks due to exposure to economically-sensitive end markets.”
4. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 194
Facebook changed its name to Meta Platforms, Inc. (NASDAQ:META) to announce its shift towards being a company focused on metaverse. Meta Platforms, Inc. (NASDAQ:META) opened its flagship Horizon Worlds VR app to teenagers. However, Mark Zuckerberg is currently indicating his plans to go full ballistic on AI after the launch of ChatGPT ushered in an era of AI wars. In a letter to staff in March, Zuckerberg said that metaverse remains “central to defining the future of social connection.” But the overwhelming theme in the letter was AI, cost cutting and Meta Platforms, Inc. (NASDAQ:META)’s focus on efficiency.
Analysts believe Meta Platforms, Inc. (NASDAQ:META)’s VR, AR technologies coupled with its AI offerings could give the company an edge over its competitors in the future.
As of the end of the fourth quarter, 194 funds had stakes in Meta Platforms, Inc. (NASDAQ:META), up from 177 funds in the previous quarter.
Wedgewood Partners made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q1 2023 investor letter:
“Meta Platforms, Inc. (NASDAQ:META)was a top contributor to performance during the quarter. Meta’s 2022 advertising revenue grew slightly (currency-adjusted) over 2021, was up over +60% compared to 2019 (pre-Covid). The shift of advertisers and consumers to social media has been fairly dramatic and sticky. Further, although Meta’s profit margins have fallen below pre-Covid levels, the business likely hired well in excess of what it needed because they assumed the Covid-19 induced growth would continue. The Company more recently guided for 2023 adjusted expense growth to be in the low single digits over 2022, which we think is a sensible level to be at as end markets normalize. We think Meta still has plenty of room to moderate its expense base and drive significant value by repurchasing shares at historically depressed multiples.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 209
Alphabet Inc. (NASDAQ:GOOG) is making inroads in the metaverse industry via acquisitions. To boost its AR efforts Alphabet Inc. (NASDAQ:GOOG) last year acquired Raxium, a microLED company that develops tiny light-emitting diodes for augmented and mixed-reality device displays. Last year, it was reported that Alphabet Inc. (NASDAQ:GOOG) was working on its own AR headset under codename Project Iris. Alphabet Inc. (NASDAQ:GOOG) reportedly plans to ship the product by 2024. Alphabet Inc. (NASDAQ:GOOG) also acquired digital avatar company Alter for $100 million.
At the end of the fourth quarter of 2022, 209 hedge funds tracked by Insider Monkey reported owning stakes in Alphabet Inc. (NASDAQ:GOOG). The most notable hedge fund stakeholder of Alphabet Inc. (NASDAQ:GOOG) during this period was Cathie Wood’s ARK Investment Management with a $25 million stake.
Ensemble Capital made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2023 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) (+17.57%): Prior to the bank runs, we had planned for this letter to include an extended discussion of ChatGPT, the new artificial intelligence (AI) features available in Microsoft’s Bing search engine, and the threats and opportunities to Google of AI powered chatbots. We will revisit an in-depth discussion of this topic in a future letter, but we do want to comment on it briefly here.
If you step back and think about what is happening with AI, two things are clear. First, AI is not new. All sorts of services you use today are powered by AI. This is particularly true of Google’s existing services. In fact, Sundar Pichai’s first speech after assuming the role of CEO was about how the age of AI was arriving and why Google was an “A.I.-first” company. But with ChatGPT, OpenAI has absolutely launched an amazing tool in allowing everyday people to use natural language chat to interface with a highly advanced AI system…” (Please click here to read the full text)
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 240
Amazon.com, Inc. (NASDAQ:AMZN) has no direct metaverse offerings as of yet but the company has been dabbling in the technology for quite some time now. Amazon.com, Inc. (NASDAQ:AMZN) launched Cloud Quest, a virtual city-based role-playing game which allows people to build practical AWS Cloud skills. In 2020 Amazon.com, Inc. (NASDAQ:AMZN) launched its Room Decorator app, which lets users try and test furniture and home décor items in their space. Last year Amazon.com, Inc. (NASDAQ:AMZN) launched “Amazonmetaworld,” a metaverse of digital gamification experiences, in five Indian cities. The experience included wearing a VR headset and walking around in virtual worlds and interacting with others.
Amazon.com, Inc. (NASDAQ:AMZN)’s most important offerings in the metaverse space are related to software. Amazon.com, Inc. (NASDAQ:AMZN) supports several extended reality companies including Campfire 3D, Meta, Magic Leap, Nvidia, and many others. AWS Spatial Computing services are famous among metaverse developers. Amazon.com, Inc. (NASDAQ:AMZN) also supports OpenXR and has converted its gaming engine Lumberyard into the Open 3D Engine in partnership with the Linux Foundation to create an open-source game engine.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
While Microsoft Corporation (NASDAQ:MSFT) has not yet launched any major projects in the metaverse space, the company has some important offerings in the AR/VR space related to metaverse technologies. In November 2021 the company launched Mesh for Microsoft Teams, which has mixed reality capabilities that allow users to interact with each other via holographic experiences.
“It’s also a gateway to the metaverse – a persistent digital world that is inhabited by digital twins of people, places and things. Think of the metaverse as a new version – or a new vision – of the internet, one where people gather to communicate, collaborate and share with personal virtual presence on any device,” the company said in a blog post while announcing the launch of Mesh.
Microsoft Corporation (NASDAQ:MSFT) is also known for its AR/VR headset called HoloLens.
You can also take a peek at 10 Most Profitable Small Businesses in 2023 and 10 Best April Dividend Stocks To Buy.
