Some investors believe the metaverse, which blurs the lines between the physical and digital worlds with virtual reality (VR) and augmented reality (AR) applications, could become the next big computing network and eventually replace the internet. So instead of holding simple video calls, we might hang out with our friends and family with virtual avatars. Mobile apps could evolve into game-like virtual experiences, while e-commerce platforms could lure shoppers to their virtual storefronts to make real-world purchases.

Those ideas might sound fanciful, but the global metaverse market could still grow at a compound annual growth rate (CAGR) of 47.6% between 2022 and 2029, according to Fortune Business Insights, as the technology improves and more companies hop on the bandwagon. If you want to capitalize on that long-term growth, you should consider accumulating some shares of Meta Platforms (META -0.28%), Unity Software (U -1.90%), and Qualcomm (QCOM 0.30%) today.

A person wears augmented reality glasses.

Image source: Getty Images.

1. Meta Platforms

Meta Platforms, the tech giant formerly known as Facebook, changed its name last year to reflect its pivot toward the metaverse. It believes its Reality Labs division, which generated only 2% of its revenue in the first half of 2022, will expand and drive the company's growth as it sells more VR and AR devices.

Back in June, Meta said it sold nearly 15 million Quest 2 VR headsets since its initial launch in September 2020. That makes Quest 2 the world's best-selling stand-alone VR headset by a wide margin. It plans to launch its higher-end Quest Pro later this year and the next-gen Quest 3 in 2023. It's also developing several AR and mixed-reality (a blending of AR and VR) devices.

Meta expects most of those devices to tether users to Horizon Worlds, a VR platform that enables its headset users to interact with each other. That platform hosted only about 300,000 users earlier this year, but that number could grow significantly over the next few years as the VR market expands and matures.

Meta still generates most of its revenue from targeted ads on Facebook and Instagram, but 3.65 billion people currently use at least one of its four apps (Facebook, Messenger, Instagram, and WhatsApp) every month. If it tethers at least some of those users to Horizon Worlds and its other VR/AR services, it could again change how we communicate with each other.

2. Unity Software

Unity's game engine is currently used to develop more than half of the world's mobile, console, and PC games. Meta used it to develop the original version of Horizon Worlds, and it even reportedly tried to buy Unity before its public debut in 2020. Unity's engine doesn't power the newest version of Horizon Worlds, but it was used to develop some of the platform's most popular VR games -- including Beat Saber and Population: ONE.

Unity is popular among game developers because it bundles graphical design and sound tools, assets, and monetization features (including integrated ads and in-game purchases) in an easy-to-use platform. Its freemium model also attracts a lot of smaller and independent developers.

This makes Unity a good pick for investors who expect developers to gradually create more applications for the metaverse. In addition to tools for creating VR and AR applications, Unity also provides "digital twin" tools that enable companies to scan and create digital replicas of physical objects.

Unity's stock crumbled this year as it dealt with the ongoing disruption of its advertising algorithms, which was more than likely caused by Apple's sweeping privacy update on iOS. But if Unity can overcome this near-term problem, I believe it could play a crucial role in creating virtual and augmented objects across the metaverse.

3. Qualcomm

If people regularly use lightweight VR, AR, and mixed reality devices to access the metaverse outside their homes, hardware makers like Meta will need to buy more chips from Qualcomm. Qualcomm is one of the world's top producers of mobile systems on chips (SoCs), which bundle together a CPU, GPU, and baseband modem for mobile device makers.

Qualcomm still generates most of its revenue from the smartphone market, but it's gradually been diversifying its portfolio with chips for connected cars, Internet of Things (IoT) devices, drones, and VR/AR headsets. Meta's Quest 2 headset was built with Qualcomm's Snapdragon XR2 chipset platform, which powers its high-resolution display, movement-sensing capabilities, battery optimization features, and Wi-Fi connectivity. If other device makers want to create competing headsets, using Qualcomm's Snapdragon XR2 chipset could be simpler and cheaper than installing a wider range of alternative chips.

Qualcomm has used this "reference design" strategy to conquer the smartphone market over the past decade, and it could leverage it again to take over the nascent markets for VR and AR devices. That strategy would significantly reduce its dependence on the aging smartphone market while making it a more balanced and diversified chipmaker.