The Wall Street skyscrapers still rise above the city, but investors are not as confident as they used to be. Fear of an imminent collapse hinders movements and prevents high profits, as no one wants to invest in a falling asset. However, panic is not logical and usually brings missed opportunities. Buying a cheap asset and waiting for the market to recover is a time-tested strategy. To implement it, you need to choose an asset with long-term potential that can be dragged into short-term chaos. Today we will be choosing from metaverse stocks.
The metaverse is a new field that has been working on increasing its capacity for several years. This realm has the potential to become the next technological frontier. Companies that are at the top of the game will reap incredible rewards even in the face of a general market decline.
The metaverse previously did not bring much profit to investors due to poor consumer readiness and underdevelopment of the market. At the time, speculative growth was inspired by trends and the opinions of a few influencers. That led to a significant industry correction. Now, this sector has long-term potential, as it could be worth up to $13 trillion by 2030.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) is famous for its achievements in artificial intelligence (AI) and 5G technology. Investors, though, may have overlooked the company’s role in developing the metaverse. The company periodically reminds investors about its global plans by supporting the metaverse infrastructure. In 2022, the Snapdragon Metaverse Fund allocated $100 million to ensure that extended reality continues to be implemented in education, medicine, and everyday life.
Continuous investment in research and development has earned the company a place among the world’s technology leaders. Like most metaverse stocks, QCOM’s trajectory was not linear. Last year, supply chain constraints and a slowdown in the handset market led to a downturn in performance. These challenges depressed the share price to almost $100. Yet Qualcomm created technology solutions for smartphones, PCs, and IoT devices, along with the development of a new AI processor, Snapdragon X Elite. Thus, QCOM smoothly climbed to local highs above $180 and made indecisive investors bite their elbows, as they did not take the chances of 2023.
The company rode the AI wave by creating Qualcomm Snapdragon Gen 8 and Snapdragon Gen 8S chips. Despite the downturn in phone sales, the tech stock is at its peak and continues to raise dividends regularly. The high diversification of the company’s interests saves it from collapse due to the decline in one area. Nevertheless, market trends are reflected in the work of this tech giant. If several sectors fall, the price bar will go down and open up new opportunities for investment during the downturn.
Unity Software (U)
Unity Software (NYSE:U) entered the list of the most interesting metaverse stocks before reporting its results for Q1 2024 due to its ability to exceed expectations. Analyst forecasts for the company’s revenue range from $415 million to $420 million. Such a decline of 15-16% year-on-year could seem negative but not for those who want to buy shares at a lower price.
Since the beginning of the year, the price of U stock has been gradually declining despite the improvements made in the company. Portfolio restructuring, focus on the core business and strategic partnerships with Valeo Racer and Mazda (OTCMKTS:MZDAY) have strengthened Unity’s position. These actions of the game maker are forecast to boost profits, as well as the imminent release of Unity 6. After these improvements along with the integration of Unity Muse, the investor community may see a share price increase similar to May-July and November-December 2023.
Matthew Bromberg will officially become the CEO of Unity Software in mid-May and give a new push to the company’s innovative aspirations. After working at Zynga and Electronic Arts (NASDAQ:EA) he is ready to share his experience in the gaming industry and the development of meta-environments. At the same time, the company reduced its staff by about 25% and moved to a more economical cost structure. The optimization of operations can reverse the downward trend in investor sentiment. It aims to improve margins in the second half of 2024. The current price of about $25 per share may be close to the local bottom, and forward-looking investors with a clear understanding of the situation can take advantage of it.
Roblox (RBLX)
Over the past year, Roblox (NASDAQ:RBLX) shares have hit the $25 mark and crossed $46 per share. However, the price chart shows no significant growth throughout 2024. The virtual gaming platform grew rapidly during the quarantine but investors became concerned about the lack of profitability. The company responded by investing in developer tools and artificial intelligence. As a result, Roblox has opened up new ways to monetize and engage users.
The reason why RBLX is among the best metaverse stocks in this dangerous period for investing is its willingness to take a shot at the market depending on market behavior. The price target of $55 means that each share can gain about $24, a 49% gain. Records in the number of daily users (71.5 million) and accelerating bookings lead to bullish forecasts. The development of the meta-space and VR initiatives is a strategic direction for the company. It allows Roblox not only to generate revenue but also to scale up. Turning the platform into a multifaceted meta-network and advertising hub opens up new revenue streams and monetization opportunities.
The platform has a high chance to capitalize on the growing demand for virtual experiences, as they are widely used for social, educational and commercial purposes. The 21.6% year-on-year increase in active users will soon be reflected in its earnings despite the high competition in the meta space.
On the date of publication, Julia Magas did not hold (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.