Somewhat displaced by the association with shady cryptocurrencies, metaverse stocks and the broader metaverse universe should be viewed as a foundation in progress. It may or may not include alternate reality/virtual reality devices, but the building blocks are clear: GPUs, CPUs, content, content creation tools and blockchain tech at large for in-game digital assets.
According to April’s Metaverse – Global Strategic Business Report from Research and Markets, the metaverse global market is still poised for great gains, at a 34.8% compound annual growth rate (CAGR), from $90 billion in 2023 to $980.5 billion by 2030.
This applies to both the software and hardware metaverse segment, at 33.9% and 37.9% CAGR, respectively.
Keeping that in mind, which metaverse stocks to buy at this moment in time? These three stocks are a good place to start.
Intel (INTC)
Intel (NASDAQ:INTC) has been through the most embarrassing period in its history. Since late 2022, users have been reporting instability issues with 13th- and 14th-generation desktop CPUs. Most recently on July 29th, the company came to the conclusion the culprit is elevated operating voltage.
Although there is a scheduled microcode fix for mid-August, it is merely a preventative measure as the affected processors are permanently degraded/damaged without any recall plans. Effectively, this makes the entire Intel Raptor Lake CPU suspect.
Normally, such reputational damage would place INTC on a bearish list, but it is more likely that this is Intel’s bottom. Alongside the Raptor Lake Refresh announced last year, the company’s major shift will happen with Intel 20A (2 nanometer (nm) node process) and 18A (1.8nm node process) during 2025 and 2026.
For comparison, Intel’s current processors are predominantly 10nm and 7nm. The lower the figure, the higher the CPU’s capacity to have lower power consumption but greater processing power due to greater transistor density on the chip. Given that Intel’s CPU and integrated graphics market share is still dominant, it is safe to say that the reputational damage has little staying power.
The company boasts a market capitalization of $151.468 billion. It is seen as a potential beneficiary in light of increasing tensions around Taiwan.
Intel is benefiting from the U.S. government through the CHIPS Act’s $8.5 billion grant and $11 billion in loans. The plan is to make the Western hemisphere less reliant on Taiwan Semiconductor Manufacturing (NYSE:TSM). Intel will be in the center of the revitalization.
Year-to-date, INTC stock is down 35% at $30.83 per share. Nasdaq’s forecasting data puts the average INTC price target at $39 per share. The low-end target of $29 per share is aligned with the current price while the ceiling is $68 per share.
Take-Two Interactive Software (TTWO)
Owner of the iconic Grand Theft Auto (GTA) and Red Dead Redemption gaming franchises, Take-Two Interactive Software (NASDAQ:TTWO) is one of the strongest metaverse stocks to buy. Under the Rockstar Games banner, GTA6 will likely break sales records again when released in the fall of 2025.
Without a doubt, Take-Two’s global brands are the closest that exist to a compelling AAA metaverse experience. GTA Online already functions as such with multiple expansions, artist contributions and role-playing communities. It is monetized through GTA+ subscriptions, in-game purchases and Shark Cards as virtual currency packs.
In fiscal Q4 2024, Take-Two reported $5.35 billion in revenue, basically flat to last year. The company delivered a net loss of $3.74 billion compared to a $1.12 billion loss in the year-ago quarter. Take-Two is a cyclical company in between large projects with massive payoffs. This outcome was not unexpected.
The company’s acquisition of mobile juggernaut Zynga for $12.7 billion in May 2022 only accentuated its cyclicality. Yet Take-Two is building the royal flush of metaverse portfolios. Its most recent $460 million acquisition of Gearbox Entertainment, known for its legendary Borderlands franchise, could be huge.
Presently priced at $150.70, TTWO stock is down 5.3% year-to-date, aligning with the 52-week average. Nasdaq’s average TTWO price target is $182.59 with even the pessimistic outlook of $154 above the current price level.
Nexon (NEXOY)
Korean Nexon (OTCMKTS:NEXOY) has made the most progress in integrating both blockchain and metaverse precepts. Built with Unity Software’s (NYSE:U) game engine in September 2022, Nexon launched Nexton Town. It created a virtual community hub combining characters from its biggest hits, like MapleStory and Mabinogi.
In conjunction with Tencent Holdings’ (OTCMKTS:TCEHY) Cloud, Nexon Town also offers real-time video communication for more immersive metaverse experiences. MapleStory Universe went further by partnering with Polygon, the blockchain layer 2 scalability solution for Ethereum (ETH-USD) for in-universe assets in the form of non-fungible tokens.
Together with Tencent, Nexon is attempting to re-energize the Chinese market with MapleStory and Dungeon & Fighter. In the Q1 earnings report, the company delivered net income of 35.9 billion yen, a 32% year-over-year drop. In Q2, Nexon expects a significant uptick in revenue in Japan, North America and Europe owing to MapleStory, The Finals and HIT: The World.
Overall, the company beat the expectations on revenue, net income and operating income, despite the cyclical downturn. Year-to-date, NEXOY stock is up 22.4%, presently priced at $21.41 per share.
On the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.