Unleashing the AI-infused Metaverse revolution with next big thing stocks Meta, Microsoft and Roblox
OpenAI’s recent introduction of Sora could provide the next step forward in leveraging artificial intelligence (AI) within the Metaverse. This will create an opportune moment for certain next-big-thing stocks. If generative AI technologies were a major focus of 2024, Apple’s (NASDAQ:AAPL) launch of its new Vision Pro product might help drive more widespread adoption of Metaverse concepts. One hurdle has been developing fully immersive and natural virtual worlds that move seamlessly with the user. Sora could address such challenges and make Metaverse experiences more appealing to broader audiences. These improvements can pave the way for the next big thing stocks in the tech industry.
Several companies have already applied AI tools within Metaverse platforms, with gaming industry leaders demonstrating particular interest. According to some projections, the video games sector currently generates an estimated $282 billion annually. However, the Metaverse may contribute more than $615 billion to the global economy by 2030. Even Walt Disney (NYSE:DIS) has unveiled initial Metaverse products. This includes its HoloTile system, which allows virtual mobility without physical movement. This could potentially lead to several next big thing stocks.
Below are three companies well-positioned to capitalize on OpenAI’s breakthrough. They will also help drive AI integration within emerging Metaverse technologies, making them potential next big thing stocks:.
Meta Platforms (META)
Meta (NASDAQ:META), Facebook’s parent company, went as far as to change its name to reflect its focus on the next big tech: the Metaverse. The company has invested more than $27 billion in developing and advancing Metaverse technologies since 2019. It continues investing heavily in the next big thing. In addition to Metaverse applications and other software, Meta also manufactures and sells its Mixed Reality headsets. These compete with Apple’s Vision Pro at a much more affordable price tag.
The company is also largely involved in AI. They explore how it can be applied within Metaverse’s virtual and augmented reality (AR) experiences. It sees the Metaverse as the next big thing in online social experiences. Also, it appears to be positioning itself at the forefront of the tech industry.
Trading at a price-to-earnings (P/E) ratio of 31.9 times, Meta’s valuation is below the average 43.5x of the tech sector. With Metaverse representing a promising new frontier while being heavily invested in it makes the company one of the next big thing stocks to consider.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) stands to significantly benefit from any innovations in AI resulting from its multi-billion dollar investment in OpenAI. While other companies have taken a more consumer and entertainment-focused approach to developing the Metaverse, Microsoft is adopting a strategic work/industrial lens. Although the company now derives most revenue from other business segments, its ties to the Windows operating system allow it to integrate advanced technologies like AI and cloud computing seamlessly. If generating static images within the Metaverse requires substantial cloud computing resources, generating immersive moving images will probably demand even greater capacity. This positions Microsoft well to boost its largest revenue stream further as virtual worlds consume higher volumes of video.
With a forward P/E ratio of 36.5 times, Microsoft offers a modest dividend yield of just 0.7%. This reflects the market’s view of the stock as a potential next big thing. Microsoft is another of the next big thing stocks to consider as it leverages its strategic investments and platform advantages in AI and cloud to capitalize on new Metaverse opportunities.
Roblox (RBLX)
Roblox (NYSE:RBLX) Roblox has been known as a pioneer in the Metaverse gaming sector. The company has seen notable growth thanks to strategic AI and virtual reality (VR) moves. It is currently working on integrating generative AI into developing and expanding immersive experiences. The company’s strategy drove 26% revenue growth in the prior year, with guidance for at least 18% sales growth this period.
Despite planning big investments to expand its user base, Roblox maintained a positive free cash flow in the last reporting year, ending with $2.2 billion in net liquidity. Analysts have adopted a cautiously optimistic view on the stock, with an average target price of $49.03 representing solid upside to the current $42.91.
This could position Roblox at the forefront of the next big thing in tech but also gaming. This makes it a tempting opportunity for investors seeking exposure to Metaverse’s digital landscape and a solid addition to the list of next big thing stocks.
Disclaimer:On the date of publication, Stavros Tousios did not have (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.