What is the metaverse and why is it an investment opportunity?

The metaverse refers to a collection of immersive 3D digital worlds where people can interact, socialize, work, and play. Think of it as the next evolution of the internet, where instead of browsing websites, you'll be able to step into virtual spaces. Companies building the metaverse are creating the technology for these experiences, from the software that renders 3D environments to the hardware that lets you access them. With estimates valuing the metaverse market at potentially trillions of dollars in the coming decade, these companies represent a ground-floor growth opportunity.

What are digital twins and why do they matter?

Digital twins are virtual replicas of physical objects, processes, or systems. For example, a factory might have a digital twin that simulates its operations in real-time. This technology is a major catalyst for metaverse growth because it has immediate business applications for training, planning, and testing. Companies can use digital twins to optimize processes and reduce costs today, creating revenue for metaverse technology companies while the consumer-focused metaverse continues to develop.

What's the difference between VR and AR technology?

Virtual Reality (VR) creates a completely immersive digital environment that replaces the real world. You typically experience VR through a headset that blocks out your surroundings. Augmented Reality (AR), on the other hand, overlays digital elements onto the real world. AR can be experienced through smartphones or special glasses that let you see both the real world and digital additions simultaneously. Many companies in this collection are developing both technologies, which serve as gateways to metaverse experiences.

Are metaverse investments considered high-risk?

Yes, investing in metaverse companies is generally considered higher risk, which is why this collection is described as "aggressive growth." The technology is still developing, consumer adoption remains uncertain, and there's competition over standards and platforms. However, many of these companies have diversified revenue streams from gaming, enterprise software, and hardware that provide stability while the metaverse evolves. For investors with a longer time horizon who can tolerate volatility, the metaverse represents a potentially significant opportunity with substantial growth potential.

What are some real-world applications of metaverse technology today?

While the full vision of the metaverse is still developing, many practical applications already exist. These include virtual training for employees (especially for dangerous or expensive scenarios), architectural visualization and planning, virtual product design and testing, immersive gaming experiences, virtual concerts and events, social VR platforms for remote connection, and augmented reality for retail "try before you buy" experiences. These current use cases are generating revenue for metaverse companies today while building the infrastructure for more ambitious applications in the future.

16 handpicked stocks

Metaverse Experience Builders

Get exposure to the companies creating the foundation of virtual worlds. These carefully selected stocks represent the innovators building the software platforms, game engines, and hardware that will define the next generation of digital experiences.

Han Tan | Market Analyst

Updated 2 days ago | Published at जून 17