Due largely to Nvidia’s (NASDAQ:NVDA) impressive performance this year, metaverse stocks are receiving attention again. The semiconductor company’s stock has increased 84% in 2024. The chip giant is responsible for the graphical hardware to run the metaverse. On top of this, the market’s performance in the first quarter is impressive. You can thank a dovish Fed for adding to the enthusiasm surrounding metaverse stocks.
Though the idea may seem overly futuristic, metaverses boast unique use cases across several fields, such as real estate, architecture design and gaming. With the market opportunity growing from $74.4 billion in 2024 to $507.8 billion by 2030, the segment is too good to ignore.
In light of this, let’s explore three stocks actively involved in the space. Two of these metaverse stocks are down substantially this year owing to their lack of diversification. However, the final pick we profile is one of the biggest companies in the world. It can easily afford to spread itself thin, investing in the metaverse with a huge war chest.
However, despite their differences, they have one thing in common. Each has a double-digit upside waiting for risk-taking investors.
Unity Software (U)
Ark Invest CEO Cathie Wood is a prominent investor in Unity Software (NYSE:U), and why not? It is exposed to many of the hottest sectors in tech, making it a can’t-miss prospect for those looking for metaverse stocks.
Although Unity’s stock is down 33% this year, it is preparing for a huge year. The $4.4 billion merger deal with IronSource is set to pay dividends toward the end of this year in the form of large EBITDA synergies and strong adjusted profitability.
Unity certainly needs the boost after recently issuing weaker-than-expected current-quarter expectations. In addition, the resignation of its CEO, John Riccitiello, amid controversy over fee changes, dented the company’s profile last year.
However, Unity is fixing these issues. In response to developer complaints, it changed its pricing structure, announcing a commitment to a free personal plan and exempting smaller titles from the new prices. Unity is also cutting back on its capital spending and projects. As a result, it hopes to remain cash flow positive this year.
Consensus estimates point to a comeback for the stock, with a 25% upside predicted.
Roblox (RBLX)
With 70.2 million daily active users and 216 million monthly active users, Roblox (NYSE:RBLX) stands out among metaverse stocks. The platform possesses a youth-oriented profile, with users under 16 making up about 60% of the population, making it an ideal fit for those looking for quality metaverse stocks.
Roblox developers have frequently upgraded the platform, which is one of the secrets of maintaining a youthful user base. Furthermore, RBLX is collaborating with companies such as Walmart (NYSE:WMT) and has announced a new Roblox Partner Program that helps broaden the appeal beyond teenagers and preteens.
However, there are challenges with investors concerned about whether RBLX can grow beyond its signature youthful user base. Parents are also concerned about the moderation of inappropriate content, considering the number of children who use the platform daily.
On the bright side, Roblox has the resources to counteract the negative momentum. Last year, it saw a 26% growth in sales to $2.8 billion and a 23% increase in bookings. In addition, RBLX recorded a 22% rise in engaged hours and daily active users (DAUs) last year, demonstrating high user engagement and retention.
Roblox now wants to top the 68.4 million DAUs recorded in 2023 by reaching over one billion daily active users, an ambitious target few metaverse stocks have achieved.
With a mean price target of around $50, the stock holds a potential upside of 38%.
Apple (AAPL)
Apple (NASDAQ:AAPL) is perhaps the safest investment among metaverse stocks. As per its latest financials, the tech giant has $162 billion in cash; that kind of firepower is rare when dealing with pureplay metaverse stocks.
Apple can also leverage well-established platforms to achieve its goals for the metaverse. When Apple unveiled FaceTime—which SharePlay and Personas enhance—we got a sneak peek at its novel approach to virtual environments.
Apple’s Vision Pro headset introduced the metaverse concept more properly. The product is connected to Apple’s other offerings, yet another example of how the tech giant leverages its ecosystem.
In particular, the services segment can become a key part of Apple’s approach moving forward. The segment ended 2023 with quarterly revenue of $23.12 billion, an 11% gain.
With these elements and the decline in share price this year, Apple is one of the most appealing metaverse stocks. AAPL stock has a mean price target of around $205, translating to an upside potential of 18%.
On the publication date, Faizan Farooque did not have (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.
