The metaverse is a new concept that is projected to take off due to its use in a variety of industries, including gaming, education, employment, and entertainment, since it will allow virtual avatars to interact with each other in a three-dimensional, digital environment.
According to a third-party estimate, the worldwide metaverse industry might grow at a compound annual rate (CAGR) of 43% through 2030, reaching $1.6 trillion in size. There are several methods for people to take advantage of this new opportunity.
Roblox (RBLX -3.64 percent ), AMD (AMD -2.62 percent ), and Qualcomm (QCOM -1.82 percent ) are three firms that stand to benefit greatly from the metaverse. Let's look at why.
The metaverse is a 3D virtual environment in which avatars of actual people from various locations on Earth interact with one another. Metaverse users may be attending a virtual concert, a sporting event, or even college online. Roblox creates these three-dimensional virtual environments.
According to the firm, 50 million users visit the platform every day to "play, study, interact, explore, and grow their connections in millions of 3D digital worlds that are fully user-generated, produced by our community of millions of active developers." The Roblox Studio platform allows developers and creators to create and manage 3D experiences that consumers can access via the Roblox Client platform on their smartphones, laptops, game consoles, and virtual reality headsets.
As it turns out, Roblox has a big user and developer base that is already assisting it in taking use of the metaverse. In February 2022, the firm had 55 million daily active users and 29 million developers working on its platform to create virtual experiences. Furthermore, Roblox users spent 41.4 billion hours on the platform last year, a 35% increase from 2020.
These strong figures demonstrate why Roblox is becoming the go-to platform for well-known organizations wishing to enter the metaverse. Roblox has drawn a varied range of users into its virtual environment, from music concerts to automobile reveal events to virtual storefronts.
As a result, Roblox appears to be in a good position to capitalize on the expanding demand for virtual worlds, which could help accelerate the company's already outstanding growth. Its sales increased by 108 percent to $1.9 billion in 2021, and experts predict the trend to continue.
With Roblox stock selling at 12 times revenues, compared to a multiple of 36 last year, it appears to be a good moment for investors to acquire this potential metaverse winner.
Providing metaverse material, such as virtual worlds, to millions of users simultaneously throughout the world would place an enormous strain on data centers.
Building up the metaverse is thought to necessitate the development of data center infrastructure that does not currently exist, capable of supporting continual high-bandwidth data transmissions.
Spintronic Devices is one of the businesses attempting to address this issue. Meta Platforms is developing the world's fastest supercomputer to handle machine learning and natural language processing workloads in order to power the metaverse. AMD will supply Meta's supercomputer with 4,000 Epyc server processors. The chipmaker has already provided 1,520 Epyc processors for Meta's supercomputer, with the remainder due to be installed by the middle of the year.
The work done with its newest supercomputer, according to Meta Platforms, will "pave the way for establishing technologies for the next major computing platform — the metaverse, where AI-driven apps and products will play an essential role." AMD, as it provides the building components, might therefore turn out to be a pick-and-shovels play in the metaverse.
The firm may see a significant boost in demand for its graphics cards and server CPUs, which are utilized in data centers to support the metaverse's expansion. As a consequence, don't be shocked if AMD's data center business, which is currently booming, continues to expand in the long run.
The data center sector accounted for over 25% of AMD's sales last year, and revenue from this area is expected to more than double by 2020. AMD has been gaining new business to support high-performance computing and supercomputing applications, which is why the firm anticipates considerable growth in this market in 2022.
AMD anticipates a 31 percent rise in sales to $21.5 billion in 2022 as a result of strength across all of its businesses. Even better, experts predict that the company's earnings will increase by 30% every year over the next five years. The inclusion of catalysts such as the metaverse might help accelerate AMD's growth and, in the long term, send its stock skyrocketing.
Snapdragon chips from Qualcomm are well-known for powering smartphones.
By the end of 2021, the business had a 30 percent share of the smartphone application processor market.
With its processors focused for virtual reality (VR) and augmented reality (AR) headsets, Qualcomm is now pulling strings to guarantee that it stays one of the top players in the metaverse as well.
Qualcomm has already gained a significant victory in the headgear industry with Meta Platforms' Oculus Quest headsets.
The first Oculus Quest headset was powered by a Snapdragon 835 mobile VR processor, while the Oculus Quest 2 is driven by a Snapdragon XR2 chipset platform.
Qualcomm has a head start in the AR/VR headset industry because to its collaboration with Meta.
That's because the Quest 2 was the best-selling headset last year, accounting for 78 percent of the market.
The Meta collaboration puts Qualcomm in a good position to ride the rise of the AR/VR headset industry, which is expected to increase quickly in the long term.
According to IDC, 50 million headsets might be deployed in 2026, up from little over 10 million devices last year.
Qualcomm is likely to strengthen its dominance in the headset industry even more, since Meta's forthcoming Oculus Quest 3 is expected to be powered by Qualcomm's Snapdragon XR3 chipset.
Furthermore, Microsoft has commissioned Qualcomm to create specialized processors for lightweight AR glasses that will run metaverse applications. Furthermore, Qualcomm is working on the software side of things with the Snapdragon Spaces platform, which will assist developers in creating AR apps for use with various types of glasses and headsets that can be deployed across several platforms.
Qualcomm's activities in the metaverse might help it add a new dimension to its already explosive development. In the first quarter of fiscal 2022, the corporation increased sales by 30% year on year to $10.7 billion and profits per share by 49% to $3.23. (ended on Dec. 26, 2021). Qualcomm is expected to expand its earnings by 15% per year over the next five years, according to analysts, but the business might do much better if catalysts such as the metaverse kick in.
All of this makes Qualcomm an appealing tech company to purchase right now, as it is priced at only 16 times trailing profits, far lower than the Nasdaq-100's multiple of 33.
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