There are two glaring problems with investing in the metaverse. First, it doesn't fully exist yet. Second, the stocks of companies vying to eventually profit from the metaverse can be very pricey.
Mitigating your risk related to the first issue is easy. Some of the companies with metaverse aspirations are already highly profitable. But what about the second problem? It's solvable, too. Here are three metaverse stocks to buy now that aren't ridiculously expensive.
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1. Apple
You might be surprised to find Apple (AAPL 0.38%) on the list. After all, the company hasn't been at the center of attention so far in discussions about the metaverse. The stock is also only 9% below its all-time high.
However, Apple CEO Tim Cook made an important revelation in the company's earnings call last week. When asked about Apple's possible role in the metaverse, Cook replied, "We see a lot of potential in this space and are investing accordingly."
It makes sense that Apple would target the metaverse. The company has already invested heavily in augmented reality (AR). While we don't know just yet what Apple's metaverse strategy is, the tech giant could become a leader in the metaverse just as it already is in other areas.
What about the stock's valuation? Sure, Apple stock trades at 28 times expected earnings. But compared to many metaverse stocks, that multiple actually looks quite attractive. And it's not much higher than the technology sector forward price-to-earnings ratio of 25.6.
2. Meta Platforms
No company is as closely associated with the metaverse as Meta Platforms (META 0.55%). That's to be expected after the company changed its name from Facebook to better reflect where it's headed.
Meta has committed to investing billions of dollars in its metaverse efforts. Unlike Apple, we have a good idea of what the company plans to do. CEO Mark Zuckerberg stated last October that Meta is building an entire ecosystem supporting the metaverse, including an operating system, content studios, a digital commerce platform, a social platform, and hardware devices.
The company shouldn't have any problems funding all of this. Meta is a cash cow, generating nearly $26.5 billion in free cash flow over the past 12 months. Its cash stockpile stood at $58 billion at the end of September 2021.
Meta's shares appear to be inexpensive as well. The stock has a price-to-earnings-to-growth (PEG) ratio of only 0.83. Any PEG below 1.0 is considered to be attractively valued.
3. Walmart
Is Walmart (WMT 1.25%) a metaverse play? In a way, yes. CNBC reported earlier this month that the huge retailer is entering the metaverse. Walmart filed new trademarks in December 2021 that related to selling virtual products as well as offering a virtual currency and non-fungible tokens (NFTs).
Perhaps it's a little early to firmly put Walmart in the metaverse stock category. The company issued a statement to CNBC and other media outlets that said it's "continuously exploring how emerging technologies may shape future shopping experiences." Walmart's statement added, "Some ideas become products or services that make it to customers. And some we test, iterate and learn from."
However, if the metaverse achieves its potential, Walmart could find a significant opportunity in it. Opinions vary as to just how big the metaverse market could become, but Nvidia CEO Jensen Huang believes that the metaverse could be "a new economy that is larger than our current economy."
Walmart's shares are also much more reasonably valued than most stocks of companies with metaverse plans. Its stock trades at 20.4 times expected earnings.
