3 Best Metaverse Stocks to Buy in April

Jhe metaverse is an emerging concept that is set to explode with its adoption in multiple areas – including games, education, work and entertainment – as it will allow virtual avatars to interact with each other in a digital world. in three dimensions.

According to a third-party estimate, the global metaverse market size could grow at a compound annual rate (CAGR) of 43% through 2030, reaching $1.6 trillion. There are several ways people could take advantage of this emerging opportunity.

Roblox (NYSE:RBLX), Advanced micro-systems (NASDAQ: AMD)and Qualcomm (NASDAQ: QCOM) are three companies that could win big from the metaverse. Let’s see why.

Image source: Getty Images.

1.Roblox

The Metaverse is a 3D virtual world where avatars of real people located in different places on Earth will interact with each other. Metaverse users can attend a virtual concert or sporting event, or they can even attend college virtually. Roblox builds these 3D virtual worlds.

The company points out that an average of 50 million people visit its platform every day so they can “play, learn, communicate, explore and extend their relationships in millions of fully user-generated 3D digital worlds, built by our community”. of millions of active developers.” The Roblox Studio platform enables developers and creators to create and operate 3D experiences, which can be consumed by users using the Roblox Client platform on their smartphones , computers, game consoles and virtual reality headsets.

It turns out that Roblox has already built a massive base of users and developers who help it leverage the metaverse. The company had 55 million daily active users as of February 2022 and it has 29 million developers on its platform, creating virtual experiences. Additionally, Roblox engaged users for 41.4 billion hours on its platform last year, up 35% from 2020.

These impressive metrics indicate why Roblox is proving to be the choice of well-known companies looking to enter the metaverse. From music concerts to car reveals to virtual stores, Roblox has drawn various players into the virtual world.

As such, Roblox appears to be well positioned to make the most of the growing demand for virtual worlds, which should help accelerate the company’s already impressive growth. Its revenue jumped 108% in 2021 to $1.9 billion, and analysts expect the momentum to continue.

Chart of RBLX revenue estimates for the current fiscal year

RBLX Revenue Estimates for Current Year Data by YCharts

With Roblox shares trading at 12 times the sell now compared to last year’s multiple of 36, now seems like a good time for investors to buy this potential metaverse winner.

2. Advanced microdevices

Simultaneously delivering metaverse content, such as virtual worlds, to millions of users around the world would create a massive load on data centers. It is believed that building the metaverse would require the kind of data center infrastructure that does not yet exist, supporting constant high-bandwidth data transfers.

Advanced Micro Devices is one of the companies trying to solve this problem. Metaplatforms is building what it calls the world’s fastest supercomputer to tackle machine learning and natural language processing workloads to power the metaverse. AMD will supply 4,000 of its Epyc server processors for Meta’s supercomputer. The chipmaker has already provided 1,520 Epyc processors for Meta’s supercomputer, with the rest to be rolled out by mid-year.

Meta Platforms believes that the work done with its latest supercomputer “will pave the way for creating technologies for the next major computing platform – the Metaverse, where AI-based applications and products will play an important role.” AMD could therefore prove to be a game of picks and shovels on the metaverse as it provides the building blocks.

The company could see a surge in demand for its graphics cards and server processors used in data centers to support metaverse growth. As a result, don’t be surprised to see AMD’s data center business — which is on fire right now — maintain strong long-term growth.

The data center business generated approximately 25% of AMD’s revenue last year, with revenue from this segment doubling compared to 2020. AMD won new business to support compute and high-performance supercomputing, which is why the company expects this segment to register significant numbers. growth in 2022.

AMD expects 2022 revenue to grow 31% to $21.5 billion on the strength of all of its businesses. Even better, analysts predict the company’s annual earnings growth of 30% over the next five years. Adding catalysts like the Metaverse could help accelerate AMD’s growth and boost its stock over the long term.

3.Qualcomm

Qualcomm’s Snapdragon processors are known to power smartphones. The company held 30% of the smartphone application processor market at the end of 2021. And now Qualcomm is pulling the strings to ensure it remains one of the best performers in the metaverse as well with its chips for virtual reality (VR) and augmented reality (AR) headsets.

Qualcomm has already won a major victory in the headset market with the Oculus Quest headsets from Meta Platforms. The first Oculus Quest headset was powered by a Snapdragon 835 mobile VR chip, followed by the Oculus Quest 2, which uses a Snapdragon XR2 chipset platform. The partnership with Meta has given Qualcomm a leg up in the AR/VR headset market. That’s because the Quest 2 was the best-selling headset last year with a 78% market share.

The Meta partnership puts Qualcomm in a good position to benefit from the growth of the AR/VR headset market which is expected to develop rapidly in the long term. IDC estimates that 50 million headsets could ship in 2026, up from just over 10 million units last year. Qualcomm looks set to further strengthen its position in the headset market, as Meta’s upcoming Oculus Quest 3 is expected to be powered by the chipmaker’s Snapdragon XR3 processor.

What else, Microsoft also tapped Qualcomm to develop custom chips to power lightweight AR glasses that will run metaverse apps. Additionally, Qualcomm is focusing on the software side of things with the Snapdragon Spaces platform, which will help developers create AR apps for use with different types of glasses and headsets that can be deployed across multiple platforms.

Qualcomm’s moves into the metaverse could help it add another dimension to its already prolific growth. The company posted a 30% year-over-year increase in revenue to $10.7 billion and a 49% increase in earnings per share to $3.23 in the first quarter of the year. fiscal year 2022 (ended December 26, 2021). Analysts expect Qualcomm to grow 15% annually in earnings over the next five years, though the company could do better once catalysts such as the Metaverse kick in.

All of this makes Qualcomm an attractive tech stock to buy right now, as it trades at just 16 times earnings, which is significantly cheaper than the Nasdaq-100is a multiple of 33.

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Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Harsh Chauhan has no position in the stocks mentioned. The Motley Fool owns and recommends Advanced Micro Devices, Meta Platforms, Inc., Microsoft, Qualcomm, and Roblox Corporation. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Garland K. Long