The metaverse became a hot topic last year, as speculative investors cheered the possibility of creating vast VR worlds supported by cryptocurrencies and decentralized apps. But over the past year, that enthusiasm has meta platformHorizon World and Decentraland Splattered.
Rising interest rates and other macroeconomic headwinds then drove investors toward more conservative investments, and the market appeared to lose interest in all Metaverse stocks. Despite that downturn, investors should still consider buying these three stocks that offer limited exposure to investing. metaverse within their larger business.
Autodesk (ADSK -0.88%) is best known for its AutoCAD computer-aided design and drafting software, but also offers a wide range of cloud-based software for architects, engineers, manufacturers, and media professionals. Many of the key tools used to build the digital world within the metaverse are part of Autodesk’s portfolio.
Autodesk’s Maya, 3ds Max, Mudbox, and Motionbuilder applications are all used to create 3D animation and special effects for video games, TV shows, movies, and VR software. It also recently integrated the architectural modeling tool Revit into Epic Games’ Twinmotion 3D visualization software platform. This partnership proves the Metaverse wasn’t built just for games, allowing an expert to collaborate on his 3D models in real time.
Autodesk’s stock price has fallen about 30% this year as investors have been dissatisfied with its price. cooling growthWe expect revenue to grow 14% this year, compared to 16% growth in both 2022 and 2021. Short-term contracts creating lower upfronts, geopolitical challenges in Russia and severe currency headwinds.
However, Autodesk continues to turn in solid profits, with a net earnings retention rate well in excess of 100%, and the stock appears to be fairly valued at 27 times expected earnings. Investors looking for a balanced play in the metaverse and exposure to mission-critical architecture, engineering and manufacturing sectors should take a closer look at this stock.
Japanese conglomerate Sony (Sony -0.38%) has also expanded into the metaverse through its games division, generating 26% of revenue and 12% of operating profit in its most recent quarter. The popular multiplayer game on PS5 is already a gateway to the metaverse, but Sony is expanding his presence in the VR market with his PSVR headset. PSVR headsets plug into PlayStation consoles and encourage game developers to add even more VR capabilities.
The first version of PSVR, which launched for PS4 in 2016, sold nearly 5 million units by early 2020. Sony plans to launch the second generation of his PSVR 2 in February 2023. The original device has a launch price of $400. That price tag seems steep, especially considering the PS5 costs $500, but Sony’s decision to move forward with a new headset suggests brighter days are still ahead for the VR and metaverse markets. increase.
The rest of Sony’s businesses, including its movies, music, consumer electronics and image sensor divisions, are recovering in post-pandemic markets. Net income is expected to decline by 5% as the high percentage of first-party games sold declines, less shows and movies are licensed to streaming media platforms, and the company weathers a tougher currency. headwind. That said, Sony’s projected profit of 16x still looks incredibly cheap.
Finally, apple (AAPL -1.46%) is a mixed reality (MR) headset that blends augmented and virtual reality capabilities and is widely expected to enter the Metaverse next year. Not much is known about the device yet, but recent rumors suggest it will be lighter and more powerful than Meta’s current-generation Quest headset.
Apple has often disrupted markets it didn’t create. It is widely known for popularizing MP3 players, smartphones, tablet PCs and smartwatches, but it only entered these areas after other companies tested the market first. If Apple can achieve the same feat with its MR headset, it could create new revenue streams, diversify its business away from the iPhone (47% of revenue in the latest quarter), and connect more users to its services ecosystem. .
If Apple’s upcoming headset gains enough momentum, it could become the foundation for its own metaverse. Its new computing platform will allow Apple to launch additional apps and subscription services beyond its core iOS, macOS, watchOS, and Apple TV platforms.
It’s all speculation for now, but Apple’s main business is stay resilient that way. Analysts expect revenue and revenue to grow by 3% and 2%, respectively, this year, as his 5G upgrade cycle ends in 2021 and rolls out new products and services in 2023. The company’s stock is reasonably valued at 22 times expected earnings, and it holds $169 billion in cash and securities, so it’s a good idea to hold on to it because rising interest rates will hit less liquid companies. has become a safe technology stock.
Randy Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platform CEO Mark Zuckerberg, is a member of the Motley Fool’s board of directors. Leo San He has held positions at Apple and Meta Platforms. The Motley Fool has positions in and endorses Apple, Autodesk, and Meta Platforms. The Motley Fool recommends the following options: Apple’s March 2023 $120 Long Call and Apple’s March 2023 $130 Short Call. The Motley Fool Disclosure policy.