The metaverse has created quite a buzz as companies and investors scramble to stake a claim in this digital gold rush. Yet this conceptual reality remains largely in the ether, not yet grounded in reality. So what exactly is the metaverse?
In simplest terms, the metaverse combines a number of emerging technologies — including augmented reality (AR) and virtual reality (VR) — with elements of ubiquitous tech like social media and video, resulting in an immersive digital world where users can work, play, shop, and socialize. Bulls are calling the metaverse the next evolution of the internet, providing a network of always-on virtual spaces where people can interact.
Naturally, investors are looking for a way to profit from this quickly evolving landscape of what many think will be “the next big thing.” Let’s look at three successful companies that will benefit from the vast opportunities in the coming metaverse.
Nvidia: Powering the metaverse
No discussion regarding the metaverse would be complete without the processing power necessary to bring the idea to life, and that’s where Nvidia (NASDAQ:NVDA) comes in. Its graphics processing units (GPUs) are the undisputed industry standard for generating lifelike images in video games, giving it a leg up in the metaverse.
The humble GPU has a superpower that will make it a foundational technology in the digital realm. Parallel processing allows GPUs to process a multitude of complex mathematical calculations simultaneously and at lightning-fast speeds.
This capability ushered in the era of artificial intelligence (AI), making Nvidia GPUs the workhorse in every major cloud computing operation and in a growing number of data centers. The evolution of the metaverse will require similar speed and precision, making Nvidia’s state-of-the-art semiconductors the obvious beneficiary.
Yet even if the metaverse takes years to materialize, Nvidia continues to grow like wildfire. During the first nine months of this year, Nvidia’s revenue climbed 65% year over year, driving its earnings per share up 132%. Nvidia generated revenue of roughly $16.7 billion last year, but that’s a drop in the ocean compared to its total addressable market, which management estimates will top $250 billion by 2023.
The incredible potential offered by the metaverse is merely icing on the cake for long-term shareholders.
Unity Software: Creating the metaverse before our eyes
While it may not be a household name, Unity Software (NYSE:U) is well-known among the gaming and developer communities. The company provides a set of software tools that helps developers create, run, and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, and consoles, as well as AR and VR devices. These tools will create the real-time graphics underlying the metaverse.
Unity recently advanced these goals with the acquisition of certain assets of visual effects specialist Weta Digital, the brainchild of filmmaker Peter Jackson (The Lord of the Rings and The Hobbit trilogies). Weta Digital helped create the visuals for iconic content including Avatar, The Avengers, Game of Thrones, Planet of the Apes, Suicide Squad, Black Widow, and more. By adding Weta’s tools to its creative offerings, Unity is hastening the coming of the metaverse.
But Unity Software doesn’t need the metaverse to be a success, as evidenced by its third-quarter results. The company generated revenue of $286 million, up 43% year over year. At the same time, Unity delivered a loss of share of $0.41, cutting its red ink by more than half. Not only did the company beat expectations, but it…
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