A wide range of tech stocks may benefit from the metaverse. There will be a $47 billion market for the metaverse in 2022, according to Grand View Research. The market is expected to increase at a 39 percent annual compound pace until it reaches $679 billion in 2030.
What are the finest stocks for investors to take advantage of in this high-growth market? Even though many firms might benefit from a growth in the metaverse, investors should pay special attention to Advanced Micro Devices (NASDAQ: AMD), and Qualcomm (NYSE: SHOP). These three top metaverse stocks need a deeper examination to see whether now is the right moment to invest in their future growth.
Microchip Technology, Inc.
A major CPU and GPU designer, AMD focuses on video games and data centers. A radio frequency identification (RFID) chip was also introduced to AMD’s portfolio as a result of the company’s recent purchase of Xilinx. As a result, Meta Platforms, the parent company of , stated last year that AMD’s EPYC processors will assist in running its data centers. Meta Platforms.
Intel’s long-time adversary, AMD, continues to lose ground in the market to AMD. A record 28 percent of the processor market is now claimed by it, according to Mercury Research. To further boost its data center and edge computing, Pensando was recently purchased by the corporation.
These accomplishments seem to be reflected in the company’s financial statements. AMD’s sales of $5.9 billion for the first quarter of 2022 (which concluded on March 26) climbed by 71% over the year-ago period. In addition, the company’s non-GAAP net income of $1.6 billion for the quarter climbed 42% over the same period the previous year. Profitability was hit by higher operating costs and a $293 million amortization charge on acquisition-related intangible assets.
AMD’s stock price has increased by 35% in the past year, despite recent losses. That has pushed its P/E ratio to 40, significantly below Nvidia’s 53, making it a good choice for investors who want to invest in this sector of the metaverse but believe Nvidia to be too pricey. ”
To expand beyond smartphone chipsets, the communications chip maker is looking into the metaverse. It has also cooperated with Meta Platforms as AMD did.
As a supplier of semiconductors for the Oculus VR goggles, it has a larger say in the project’s direction. In addition, Microsoft has worked with it. AR glasses from Qualcomm and Microsoft’s Mesh virtual reality platform will be powered by Qualcomm.
More critically for investors, Qualcomm seems to present an opportunity that is underestimated. There was a 35% increase in revenue in the first six months of fiscal 2022 (which concluded on March 27) compared to the first six months of fiscal 2021. The company’s net income grew by 50% to more than $6.3 billion throughout the time, while limiting cost and expenditure increases by only 22%.
Stock prices have only increased marginally this year despite this expansion. Although the P/E ratio has dropped to only 14, it is still lower than every other big semiconductor company except Intel. Investors may wish to acquire this metaverse stock now while it is still inexpensive, given the low multiple and the quick rise in profits.
Investors are more familiar with Shopify’s e-commerce platform, which has no visible link to the metaverse. While this is the case, Shopify has enabled its merchants to show AR and 3D versions of their items on Shopify’s platform. ARitize3D consolidates these images into a single app, which is a significant improvement over prior versions that needed different applications to be used to see these visuals.
Investors have additional reasons to purchase and hold Shopify. In addition to inventory management, payment processing, and cross-border trade, it delivers these services. However, the Shopify Fulfillment Network seems to have surpassed its status as a software firm (SFN). Unlike its software-oriented rivals, the SFN handles all aspects of order fulfillment, from processing to packaging to shipping.
Sales of $1.2 billion were generated in the first quarter of 2022, an increase of 22% over the previous quarter for Shopify. The company’s adjusted net income fell from $254 million to $25 million due to rising costs and higher income taxes.
However, the business expects things to get better in the fourth quarter. It’s also worth noting that a 70% drop in stock price over the past year could make up for the difficulties investors have had. Its P/S ratio is at its lowest level in six years at roughly 10 points. Investing in Shopify shares should ultimately continue its upward trend as the company’s e-commerce expansion expands both inside and outside the metaverse.
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