Investing in Metaverse Stocks

For those looking to invest in metaverse stocks, it's best to start with an understanding of the metaverse.

The metaverse is defined as a digital, three-dimensional world that's immersive and accessible in real time by an unlimited number of people, allowing for social interactions, commerce, and more. Right now, this is more science fiction than reality. However, various tech companies are trying to bring the vision to life.

Patience is key here because the metaverse could take a decade or more to develop. But this is actually great news for investors. The metaverse is still in its early stages, so it's not too late to invest in metaverse stocks. Let's look at ways to invest in this exciting space and some of the companies that are positioned to profit from the trend.

Metaverse investing

How to invest in the metaverse

Investors can approach this secular trend from multiple angles. Consider the following non-exhaustive list of potential layers to the metaverse:

• Immersive hardware: The digital metaverse is accessed with physical hardware -- hardware that must immerse the senses if people are going to adopt the concept en masse. Right now, devices are fairly limited to virtual reality (VR) headsets, which only incorporate the senses of sight and sound. Top headset companies such as Meta Platforms (META -2.29%) and Sony (SONY 3.12%) are also prioritizing a more hybrid approach with augmented reality (AR) headsets, overlaying digital images on physical spaces, which is otherwise known as spatial computing.
  
  In the future, however, metaverse hardware devices could also incorporate other senses, such as touch via haptic devices. Advances in artificial intelligence (AI) have even allowed start-up company Osmo to digitize smell, providing a roadmap to incorporate another of the human senses into metaverse applications.
• Interactive platforms: In the same way people visit websites via the internet, there will need to be virtual worlds -- interactive platforms -- to visit in the metaverse.
• 3D creation software: Many of today's metaverse platforms are experienced in 2D. But whether it's building the virtual world's scenery or creating items that can be bought and sold, the metaverse needs software solutions to enhance the user experience with 3D content creation.
• Connectivity: The connection will need to be lightning-fast to accommodate unlimited metaverse participants in real time. And computers will need to be powerful to render 3D smoothly.
• Semiconductors: In the same vein, the metaverse's computing power requirements will be massive and require advancements in semiconductor technology. The metaverse will also generate an enormous amount of data that will need to be stored.
• Security: Once people are enjoying more activities in the metaverse, their identities and finances will need protection, making cybersecurity increasingly indispensable.

With so many aspects to choose from, there's likely a metaverse stock to fit any investor's style and risk tolerance.

Best stocks in 2025

Best metaverse stocks to buy in 2025

As previously mentioned, it could be many years before the metaverse exists in its fullest form. So, the best metaverse stocks to buy today aren't entirely dependent on the metaverse but rather already have thriving businesses outside of the metaverse trend.

Here are some top considerations, in no particular order:

1 - 3

1. Meta

Formally known as Facebook, Meta Platforms is spending more on the metaverse concept than any other company in the world. Most of the company's revenue is generated by ads on the Facebook and Instagram apps.

However, Meta Platforms has another part of the business called Reality Labs, which sells hardware devices and VR content. Its Oculus VR headsets have collectively sold more than any other on the market, making Meta a top stock for immersive hardware.

The company is also investing billions of dollars annually to advance VR and AR applications -- more than most other metaverse companies could dream of. If there's a future in the metaverse, Meta will likely play an important part.

2. Roblox

Roblox is already a go-to virtual world that could be an early-stage version of a metaverse platform. Musicians and celebrities host live events on Roblox's platform, perhaps signaling that these are gaining mainstream appeal.

In the past, the platform primarily resonated with U.S. users younger than 13. But it's developed into a global company with an increasingly expanded set of older users. The metaverse will likely have multiple interactive platform destinations. However, with almost 112 million daily active users already, Roblox has a big head start.

3. Cloudflare

Cloudflare is a global content delivery network (CDN), positioning internet content physically closer to users with its network of more than 330 data centers. The proximity makes connections faster, and the company's cybersecurity solutions can make connections more secure as well. Both things are useful to the metaverse concept.

However, Cloudflare believes that Web3 could be the future of the metaverse -- decentralized metaverse applications will use blockchain technologies. Because of this, the company has invested in becoming a gateway for the Ethereum (CRYPTO:ETH) ecosystem, which means that developers can build applications without running the underlying infrastructure.

4 - 5

4. Unity

Unity Software is a leader in the 3D software space. The company's products are popular among developers, and it's reasonable to expect it to create a lot of 3D content for the metaverse.

It's also reasonable to believe the company can take market share from competitors due to its unique value proposition. Consider that two of its subscription tiers -- Unity Personal and Unity Student -- are free to start. This familiarizes content creators with Unity's software. And as these creators find financial success, they'll likely become paying Unity customers.

5. Nvidia

Tech giant Nvidia (NVDA -0.77%) addresses many big metaverse needs, including 3D content creation, powerful graphics rendering, AI, and more, making it a top metaverse stock as well.

Its graphics processing units (GPUs) have long been used in the video game space and are now finding plenty of use in powering AI models. Beyond hardware, the company has software of its own that has applications in creating digital worlds and 3D content.

Given its stellar stock market performance in recent years, Nvidia is quickly becoming a household name. Yet, it still has a lot of potential in the metaverse trend.

Metaverse ETFs

A metaverse ETF to consider

Maybe you can't decide which metaverse stock to buy, or maybe you want broader exposure than a single stock. Consider buying a metaverse-focused exchange-traded fund (ETF) comprised of dozens of stocks.

There are several metaverse ETFs out there. But most of them may be too small to warrant attention from investors. The largest ETF is the Roundhill Ball Metaverse ETF (METV -0.71%); consequently, it may be the safest. This ETF includes all five of the stocks already listed here, plus dozens more, providing instant diversification for shareholders.

Like all ETFs, the Roundhill Ball Metaverse ETF is subject to a fee, which is 0.59% in this case. Fees can negatively affect shareholder returns over the long term, so investors need to be sure they know how to invest in ETFs before buying shares.

Where to buy?

Where can I buy metaverse stocks?

To buy stocks and ETFs, investors need to have a brokerage account. The best brokerages are extremely user-friendly, allowing accounts to be opened with no minimum deposit and also offering zero-fee trades.

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Cryptocurrencies

What about metaverse cryptocurrencies?

It's unclear whether metaverse infrastructure will be built by companies or built with decentralized blockchains and cryptocurrencies. It's worth keeping at least a couple of cryptocurrencies in mind.

1. Ethereum

Ethereum is a crypto ecosystem that could be useful in the metaverse. In the metaverse, it's important to be able to own property. And non-fungible tokens (NFTs) can easily be created, bought, and sold with smart contracts on Ethereum.

2. Theta Network

From an infrastructure perspective, Theta (THETA -0.19%) is also worth watching. Similar to Cloudflare, it's a content delivery network, and it's quickly captured the attention of Alphabet (GOOG -0.04%)(GOOGL -0.16%) and Samsung, which are big names to have on your side. Theta also holds many patents, mitigating the competitive risk from other decentralized solutions.

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