The compelling growth potential of the metaverse continues to catch the attention of investors. BrandEssence Market Research estimates a compound annual growth rate of 45% over the next five years, and Morgan Stanley's Brian Nowak believes it represents an eventual addressable market of $8 trillion, according to an interview with Forbes.

Time will tell whether those forecasts prove accurate. Nonetheless, such predictions point to the likelihood that the virtual world will bolster some tech stocks. Through applying metaverse functionality, Matterport (NASDAQ:MTTR) and Zoom Video Communications (NASDAQ:ZM) have positioned themselves to become key companies in this emerging industry. Let's take a closer look at these two stocks and whether they would make good buy-and-hold plays on the metaverse.

A person motioning with her hand while wearing a VR headset to experience the metaverse.

Image source: Getty Images.

1. Matterport

Matterport bills itself as "the world's leading spatial data platform," and this data can easily play a crucial role in the metaverse. Matterport builds what it calls "digital twins," or 3D models of physical spaces. Displaying spaces for sale or rent, managing construction jobs, and capturing unique places are among its most common applications. Also, its software functions on a smartphone, making it more accessible to smaller players.

Although it has attracted competition from Zillow Group and other real estate sites, its functionality helps it deliver a more metaverse-oriented view than software produced by Autodesk, which has long helped develop spatial representations such as schematics.

Moreover, management says it has a $240 billion total addressable market, and Matterport has barely begun to reach that market. In the first nine months of 2021, the company reported $84 million in revenue, 35% higher than the first three quarters of 2020.

But operating expenses more than doubled during that time, and the company lost an additional $123 million due to fair-value changes in warrant liabilities and contingent earn-out liabilities (basically, these are stock options that have yet to be exercised). This led to $177 million in losses for the first nine months of 2021.

The stock also suffered as it cut its full-year revenue outlook to a range of $107 million to $110 million, down from the previous range of $120 million to $126 million. Matterport did not report its full-year revenue in 2020 since it was a private company until it merged with a special purpose acquisition company (SPAC) in July. But analysts forecast a 47% revenue increase in fiscal 2022.

The stock price has fallen by nearly half since its high in late November. At just under $17 per share, it is not far above the $14.23 opening price following the SPAC merger. This discounted price, along with the massive addressable market and growth forecast, should position the stock to deliver significant stock returns over time.

2. Zoom Video Communications

Zoom became more popular during the pandemic as locked-down individuals and organizations turned to the platform to hold meetings online. The stock price surged through the first few months of the pandemic but has lost nearly 70% of its value since its October 2020 peak.

But the company could experience a comeback as it takes online meetings into the metaverse. It has partnered with Meta Platforms -- the former Facebook -- to offer a "mixed reality" experience that can give the appearance of sitting across a table from somebody who is located elsewhere.

It will face competition from Microsoft and Alphabet. But the connection with Meta and Zoom's established presence in virtual-meeting software could give it the necessary competitive advantages to thrive.

Even amid fewer lockdowns, Zoom managed to generate almost $3 billion in revenue in the first three quarters of fiscal 2022, 71% more than in the same period in fiscal 2021. This helped it earn a profit of $885 million in the first nine months of fiscal 2022. Earnings surged 115% compared with the same time frame in fiscal 2021 as a $78 million income-tax expense was more than offset by $155 million in gains on strategic investments.

Growth could slow as the $1.05 billion of revenue predicted for Q4 would mean an increase of just 19% as growth in its current platform slows. Still, rising profits and the falling stock price have taken Zoom's price-to-earnings ratio to just 47. Though that is higher than either Microsoft or Alphabet, Zoom's $53 billion market cap makes it much more of a growth stock than those two peers, with their market caps exceeding $1 trillion. When combined with the metaverse functionality, that smaller size could make Zoom a potentially lucrative choice for investors in this space.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.