2022 brought numerous disappointments for investors amid the worst bear market since the 2007-09 financial crisis. The metaverse and the companies working to bring it into existence were one of those big 2022 disappointments as many metaverse stocks lost a significant portion of their value this year.

It's clear that investors reduced their expectations for the sector, but the metaverse is not going away and bright spots will likely emerge, resulting in some degree of recovery. To that end, Microsoft (MSFT 1.29%), Qualcomm (QCOM 2.90%), and Alphabet (GOOGL 1.86%) (GOOG 1.83%) should benefit from that rebound.

Let's find out a bit more about these three metaverse stocks and why they might be great buys now and into 2023.

1. Microsoft

Microsoft developed into a tech giant thanks to its presence in the PC space, gaming, and the cloud. Now, the metaverse is one of the areas where it wants to extend its reach. To that end, it has partnered with Meta Platforms (META 2.65%) to offer immersive experiences through its Microsoft Teams software. A new product called Mesh will integrate Teams with Meta's Oculus headsets to enable immersive experiences.

Additionally, Microsoft worked to integrate the metaverse with other applications, including gaming. Building on its Xbox ecosystem, the company is working to acquire gaming giant Activision Blizzard, allowing Microsoft to enter the metaverse through gaming.

The company can afford to make such investments. It claimed more than $107 billion in liquidity at the end of the fiscal first quarter of 2023 (which ended Sept. 30). And with about $17 billion in free cash flow in the latest quarter, such investments can probably continue.

Amid a bear market, its stock lost about one-fourth of its value over the last year. But that took its P/E ratio to under 27, near its lowest valuation since early 2020. This (likely temporary) drop in valuation could present an opportunity to buy this tech stalwart at a relative discount.

2. Qualcomm

Investors have long known Qualcomm as the leading provider of smartphone chipsets. While it continues to lead that market, Qualcomm is also investing heavily in the metaverse.

For one, it supports the market-leading Oculus VR headsets from Meta Platforms, providing the chips that power the devices. Qualcomm has also set up a $100 million Snapdragon Metaverse Fund to promote extended reality (XR) applications. While nobody can predict if or how much such initiatives will succeed, the fund could help make Qualcomm a major metaverse player.

Despite this potential, a slowdown in consumer spending and the company's heavy dependence on China have weighed on the stock. Moreover, the relationship with Oculus strongly ties its fortunes with Meta, and the Facebook parent has so far failed to impress investors in the metaverse.

Investors should remember that, even with challenges in the metaverse and elsewhere, Qualcomm managed to generate almost $7 billion in free cash flow in fiscal 2022 (which ended Sept. 25). That does not include the more than $6 billion it also holds in liquidity. 

Even though Qualcomm stock has lost one-third of its value, investors will struggle to find a more reasonably valued metaverse stock. Currently, it sells for just 11 times earnings, a level that will probably look even cheaper when consumer spending rebounds.

3. Alphabet

Investors know Google's parent Alphabet for its search engine and role in pioneering digital advertising. It also became an increasingly important cloud company in recent years through Google Cloud. Google Cloud is now forging a path into the metaverse. It has sought to create a more immersive experience through computers and has made various attempts to develop smart glasses.

Among these capabilities is Project Starline, which can simulate that remote meeting attendees are across from one another. It also offers Immersive View, which works with Street View and can mimic the experience of a user exploring a distant location as if they are in person.

Alphabet does not release any separate financials directly related to the metaverse. However, it held more than $116 billion in liquidity as of the end of the third quarter of 2022. It also generated over $16 billion in free cash flow in the third quarter. This positions the company to fund further metaverse investments, regardless of the economy or interest rates.

That situation has not stopped slowing growth rates from weighing on the stock, and it lost about 30% of its value over the last year. Still, its P/E ratio of under 20 is near a multiyear low for its valuation. As it increases its role in the metaverse, both the stock price and earnings multiple should rise, making it a no-brainer stock to buy.