Metaverse stocks have been a hot topic over the last few years. The ‘’Metaverse’’ was first discovered in the early 1990’s, but only began to take investors attention over the last five years. 

After the emergence of the World Wide Web, in 1989, sci-fi writer Neal Stephenson coined the term ‘Metaverse’ in 1992, to describe a 3D virtual space. Thanks to advancements in the blockchain, online gaming,  and VR (Virtual Reality) hardware/software, and augmented reality the Metaverse was re-born. 

According to Bloomberg, the TAM for the Metaverse could reach as high as $800B by 2024. Below we will discuss our top 3 Metaverse stocks to consider for 2022. 

Meta Platforms (Formally Facebook)

Meta Platforms, formerly known as ‘’Facebook’’, first dipped its toes into the Metaverse back in 2014, with the purchase of virtual reality gaming startup Oculus, for $2 billion. Since then, Facebook has rebranded to move further into the Metaverse. 

In a Founder’s Letter posted on October 28th, 2021, Mark Zuckerberg described the defining quality of the Metaverse as a ‘’feeling of presence.’’  

The company is now focused on building a platform where you can interact with and ‘’get together with friends and family, work, learn, play, shop, create — as well as completely new experiences that don’t fit how we think about computers or phones today.’’ 

Fourth Quarter 2021 Earnings Highlights:

• Reported quarterly revenue of $29.01B, up 35% year-over-year.
• Daily Active Users (DAUs) of 1.93 billion, up 6% year-over-year. 
• Monthly Active Users (MAUs) of 2.91 billion, up 6% year-over-year. 
• Ended the quarter with $58.08B in cash and cash equivalents as of September 30, 2021. 

Why Meta Platforms Inc? 

Meta Platforms user growth continues to climb across Asia-Pacific, Europe and USA & Canada. During the third quarter of 2021, Meta Platforms grew its free-cash flow (FCF) to $9,547 billion, up from $8,511 billion in the second quarter of 2021. With a long history in virtual reality, augmented reality and hardware applications, Meta Platforms is a top metaverse stock to watch in 2022. 

Nvidia Corporation

The Metaverse would not be possible without key chipmakers like Nvidia, Intel and AMD. If you’re into gaming there is a chance that you may be familiar with Nvidia. Nvidia is a U.S. based, multinational technology company that designs and manufacturers GPUs and SoCs for the gaming, computing and automotive markets. 

With the emergence of 5G and the metaverse in gaming, VR/AR, the sector has caught more investors attention. Nvidia has been taking advantage of the metaverse in many different ways. One being the expansion of their cloud-native, Omniverse platform that runs on any RTX platform and is scalable across multiple GPUs. 

If you’re not already familiar, the metaverse has become very popular in many online gaming platforms. Virtual worlds like Minecraft, Roblox, and the infamous Travis Scott Fornite concert. Nvidia has also expanded on the ‘’Nvidia Omniverse’’, a platform used to connect 3D worlds into a shared virtual universe. 

Third Quarter Fiscal 2022 Earnings Highlights:

• Record revenue of $7.10 billion, up 50% year-over-year.
• Record Data Center revenue of $2.94 billion, up 55% percent year-over-year.
• Record Gaming revenue of $3.22 billion, up 42% year-over-year. 
• NVIDIA issued quarterly cash dividends of $100 million in the third quarter of fiscal 2022. 

Why Nvidia Corporation? 

Nvidia is not only a leader in the metaverse world, but a leader in the gaming, computing and automotive markets. The company saw record revenue and earnings in the third fiscal quarter of 2022. With the expansion of Nvidia’s Omniverse platform, and continued growth across all business segments, the company can see significant tailwinds for 2022 and beyond. 

Microsoft Corporation  

If you haven’t been living under a rock for the past few decades, chances are you’ve heard of Microsoft before. Founded in 1975, by Bill Gates and Paul Allen, Microsoft is a U.S. based multinational corporation that produces computer software, consumer electronics and personal computers. 

In April 2021, Microsoft launched Microsoft Mesh, which aims to change the way virtual meetings are conducted. Greg Sullivan, the director of mixed reality at Microsoft, described the platform as a way for users to ‘feel like they’re in a physical location that is hundreds or thousands of miles away.’ 

Microsoft Mesh allows users to conduct meetings, give presentations, walkthroughs and use many other collaborative features using VR/AR technology. With the growing work- from-home trend and hybrid-model within company structures, Microsoft Mesh aims to fill this gap. 

Second Quarter Fiscal 2022 Earnings Highlights:

• Revenue was $51.7 billion, up 20% year-over-year.
• Operating income was $22.2 billion, up 24% year-over-year.
• Net income was $18.8 billion, up 21% year-over-year.
• Microsoft Cloud revenue was $22.1 billion, up 32% year-over-year.
• Returned $10.9 billion to its shareholders in the second quarter of fiscal 2022.

Why Microsoft Corporation?

Microsoft just came off a record quarter with revenue and net income up 20% and 21% respectively. The company also announced the acquisition of Activision Blizzard and saw its teams platform pass 270 million MAUs. With accelerated growth across all business segments, and key investments into the Metaverse, Microsoft should be at the top of your radar for 2022.

Disclosure: The author holds no position in Meta Platforms Inc, Nvidia Corporation, or Microsoft Corporation. Freedom Stocks has a disclosure policy.