What is the metaverse and why does it matter for investors?

The metaverse refers to interconnected virtual worlds where people can interact, work, play, and transact. It's essentially the next evolution of the internet, moving from 2D screens to immersive 3D environments. For investors, the metaverse represents a potentially massive new market as billions of people adopt virtual and augmented reality technologies for both work and recreation. Companies that own the intellectual property behind these technologies may be positioned to benefit significantly as this digital ecosystem grows.

What are patents and why are they valuable for tech companies?

Patents are legal rights granted to inventors that prevent others from making, using, or selling their inventions without permission, typically for 20 years. For technology companies, patents create a competitive advantage by allowing them to be the exclusive provider of innovative features or collect licensing fees from others who want to use their technology. In rapidly developing fields like virtual and augmented reality, owning fundamental patents can mean controlling access to essential building blocks that everyone else in the industry needs, potentially generating revenue streams long into the future.

What is the difference between virtual reality (VR) and augmented reality (AR)?

Virtual reality (VR) completely immerses users in a digital environment, typically using a headset that blocks out the real world. Augmented reality (AR), on the other hand, overlays digital information onto the real world, enhancing what you see rather than replacing it. Many companies in this portfolio develop technologies for both approaches, as well as "mixed reality" which combines elements of both. Each technology has different application strengths - VR excels in gaming and training simulations, while AR has stronger potential in everyday work and consumer applications.

What does "Market Cap" mean when looking at these stocks?

Market capitalization (or "Market Cap") is the total value of a company's outstanding shares of stock. It's calculated by multiplying the current stock price by the total number of shares. In this portfolio, you'll notice a mix of large-cap companies like Apple and Microsoft alongside smaller specialists like VUZI and IMMR. Larger companies may offer more stability but potentially slower growth, while smaller companies might provide higher growth potential with increased risk. Market cap helps you understand the relative size and maturity of the companies you're considering.

What is a "Consensus Recommendation" for stocks?

A Consensus Recommendation represents the average rating that financial analysts have given to a stock. These recommendations typically range from "Strong Buy" to "Strong Sell." When multiple analysts covering a company reach similar conclusions, it creates a consensus view that can help investors understand how professionals view a stock's prospects. However, it's important to remember that analysts sometimes miss major shifts or developments, and consensus isn't always right. This rating should be one of several factors in your investment decision, not the only one.

15 handpicked stocks

Patent Power Portfolio

Invest in the companies that own the blueprints to our digital future. These carefully selected firms hold valuable patents for virtual and augmented reality technology, positioning them at the foundation of the emerging metaverse economy.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17