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Metaverse Investing: The Backbone’s Where the Real Growth Is At

Everyone’s talking about the metaverse now that Mark Zuckerberg’s pointed the Meta (Facebook) ship towards the virtual horizon. But, while there’s no question that Meta’s leading the charge for the moment, it’s not the only investment opportunity in the space. In fact, looking towards the companies that are building the backbone technologies of the metaverse, much greater potential opens up.

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The metaverse has been the word on the streets since Mark Zuckerberg dropped the news that Facebook was rebranding as Meta and going all-in on the metaverse. But while the future direction our technology landscape is headed in is evident, investors looking to add a dash of metaverse to their portfolios are still finding their feet.

The reality is, the landscape of metaverse companies spans much further than Meta’s hardware and platform developments. In fact, given that a major component of Meta’s metaverse monetization strategy will be to just keep doing what it already does (i.e., ads), Meta may not even realize any substantial benefit from the growth in the metaverse given it already controls such a dominant portion of global screentime.

However, looking a little further, there are quite a number of companies poised to see much bigger gains in the metaverse. These companies are those specialized in the technologies that are set to grow the fastest in the metaverse—technologies like blockchains, augmented reality, and virtual reality.

Top Picks for Metaverse Investors

In the metaverse space, investors would do well to look straight towards the stocks of companies that are building the backbone of the metaverse. As we’ve touched on already, augmented and virtual reality will be a major part of this. Broadening the scope a little here, this implies both software and hardware specialists working in the immersive technology space.

With this in mind, here we’ve picked three different stocks set to shoot for the stars thanks to the metaverse.

Coinbase Global, Inc. (NASDAQ: COIN) Bringing Blockchain to the Metaverse

When we hear about the social experiences awaiting us in the metaverse, there’s one key theme that inevitably always comes up: digital goods. Whether that be virtual property in Decentraland, or virtual avatar clothing for whatever platform we’re on, these goods, which are already making a splash, are set to take off in a big way.

Of course, speculating on individual assets is risky here, which is why we’re looking towards the backbone here: the cryptocurrencies which will be transacted in this digital goods world.

Necessarily, this will imply a higher demand for cryptocurrency for use in transactions, positioning crypto exchanges to see a solid increase as traditional currencies begin taking a back seat in the metaverse.

For this reason, one of the companies we’ve got on our radar is Coinbase. As one of the more established public players in this space, it’s in a good position to maintain a sizable portion of the crypto market in the metaverse.

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Investor confidence also seems high here, with its stock price already seeing big gains in the lead up to, and after, Mark Zuckerberg’s metaverse announcement.

XRApplied Technologies Inc. (CSE: XRA | OTCQB: XRAPF) Is Creating the AR/VR Picks and Shovels

Continuing our theme of investing in the backbone of the metaverse, our next stock pick is augmented and virtual reality specialists XRApplied Technologies Inc. The company, which has created a proprietary AR and VR development platform has, amongst other things, been variously described as creating the “picks and shovels” of the space.

To understand what sets XRApplied apart from other companies in the space, it’s first necessary to understand that AR and VR software development is a formidably expensive endeavor. With layers of complexity that are not seen in traditional screen-based settings, the time and expertise factors quickly multiply development costs well beyond what many SMEs are able to swallow.

To solve this, XRApplied has taken the approach of breaking down software development into reusable components which can be quickly repurposed in any number of applications. This toolkit empowers XRApplied to apply the same logic controlling the positioning of an AR game character, for example, to an avatar in a corporate training application, or even a digital replica of any number of objects. For reusability purposes, what matters here is the object’s position in space, not the final ‘skin’ that has been applied to it.

Given the broad applications of the toolkit, and the fact that it significantly drives down the cost of development for SMEs, XRApplied is well-positioned to become a dominant player in the emerging AR and VR metaverse spaces.

NVIDIA Corporation (NASDAQ: NVDA) Creating the Core Hardware Behind the Metaverse

If AR/VR and blockchain are going to be major foundations of the metaverse, then chip maker NVIDIA is in for a major boost in demand for its hardware. As the leading graphics chip maker since the dawn of the graphics chip (it was NVIDIA that created the first dedicated graphics card), whenever high-quality graphics are involved, NVIDIA is the company behind the hardware powering them.

Of course, it goes without saying that graphics processing will be a major part in powering AR and VR experiences, but it’s worth mentioning just to make sure we’ve checked off the obvious.

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Where NVIDIA gets really interesting, however, is that, due to the nature of the calculations used in many crypto assets, NVIDIA’s chips are experiencing growing demand for use in blockchain mining applications. Here they outperform traditional CPUs by many multiples, both in terms of raw speed and in power efficiency.

This use also expands into other compute-heavy tasks where the raw calculating efficiency of a graphics card makes sense. In fact, much of the Artificial Intelligence (AI) being developed is only possible thanks to the commercial availability of these cards.

All this makes NVIDIA extremely interesting from a metaverse perspective. With a broad array of applications for its hardware within different metaverse technology verticals, it’s a diversified bet that still promises solid returns.

Keep your Eyes Trained on the Rapidly Evolving Metaverse

The metaverse is a rapidly evolving space in technology, and we’re bound to see new promising players come onto the scene as interest in, and use of the metaverse continues to build. This will see plenty of opportunities for metaverse investors opening up.

However, whilst the window for metaverse investing isn’t closing any time soon, the exponential growth that only new, emerging industries can deliver will have a limited time span. For this reason, investors would be wise to get in on these and other metaverse opportunities sooner rather than later.

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(Featured image by Tara Winstead via Pexels)

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Michael Jermaine Cards is a business executive and a financial journalist, with a focus on IT, innovation and transportation, as well as crypto and AI. He writes about robotics, automation, deep learning, multimodal transit, among others. He updates his readers on the latest market developments, tech and CBD stocks, and even the commodities industry. He does management consulting parallel to his writing, and has been based in Singapore for the past 15 years.