Metaverse Investing
In the introductory article of Metaverse I discussed the basic idea of Metaverse and in this article I aim to provide more details on companies that are actively working on this technology. The content here would be more business oriented than technology and if you are interested in investing in this new technology, you are at right place, so read on.
The idea of Metaverse is closely related to key technologies like Internet, Blockchain, and Gaming. Hence to explore the investing opportunities, we need to have a look at the companies in this space. Let’s have a look at an exchange traded fund (ETF) called META by Roundhill Investments. This ETF was launched in June 2021 and has total 41 companies invested in as of this writing. The categories of companies are in the area of compute, network, virtual platform, payment, interchange standards, content and asset services and hardware. This gives us a good idea that a successful implementation of Metaverse relies on not only on just one technology but other enabling platforms as well.
In compute or hardware category, NVIDIA (NVDA) is on top, as it is a GPU manufacturing company and leader in graphics hardware. Other companies in hardware area are, Taiwan Semiconductor Manufacturing (TSM) and Qualcomm (QCOM). With an industry shift towards ARM based computing, TSM and QCOM are important providers of ARM chips. These hardware companies are expected to bring in revolution with their new chips both in CPU, GPU as well as Machine learning processing units that will provide the required compute for Metaverse platform. In gaming category, new age companies like Roblox (RBLX), Unity (U) and Activision Blizzard (ATVI) are changing the landscape of immersive gaming and virtual reality software. These companies are already having the gaming or virtual reality engines that can be used as a foundation software stack for building immersive applications. Facebook (FB) with massive hold on social platform is well positioned to make a disruption in the way we will consume the content in future. In Blockchain space, Coinbase (COIN) has more to offer than being crypto exchange services. Payment companies like Square (SQ) and Paypal (PYPL) are planning to offer next generation services and will accelerate crypto payment integration with other platforms. This list is by no means complete but definitely a promising one if you want to get started in investing Metaverse technology.
On the other side of investing, we have crypto space. And here platforms like Ethereum (ETH), Cardano (ADA) and Solana (SOL) are well positioned with their respective Blockchain offering. It is also important to understand, we already have got good start on Decentralized Finance (DeFi) on these platforms. In future, we can anticipate some form of integration of already existing DeFi application within Metaverse. It is for sure that Metaverse economy will be driven by crypto and not traditional fiat currency. At the same time, these Blockchain platforms offer the required trust-less foundation for integrating different components of Metaverse. When it comes to interoperability between different Blockchain platforms technologies like Polkadot (DOT) and Chainlink (LINK) are solving the challenges in interconnected network of blockchains and tamper-proof data sources.
And the last Metaverse is incomplete without an effective delivery platform. At this point of time, it is still not clear how end user is going to consume Metaverse. If we stick to traditional way of mobile computing then companies like Google (GOOGL), Apple (AAPL) and Microsoft (MSFT) will still have a significant share in Metaverse. Or it could be the new generation virtual/augmented or mixed reality companies like Oculus VR, HTC that will take over mobile computing. I believe it would be the established mobile computing companies that would transform themselves to adopt new way of consuming digital content and I would not be surprised if there are significant acquisitions of niche player in this field.
One thing note here is, there will not be a single company that dominate Metaverse as initial vision is based on more open and collaborative platform than a vendor locked-in technology. The key to success here is, how well the above mentioned technologies get integrated with each other to provide a seamless experience to end users.
I hope this gives a better idea where are the investing opportunities for Metaverse. I am not a financial advisor and this article is for educational purpose only, so I would encourage to do your own research when it comes to investing.