The metaverse market is expected to grow substantially, reaching an estimated value of $116 billion by 2024 and potentially $669 billion by 2030. This rapid growth is driven by the integration of digital and physical worlds through technologies like augmented reality (AR), virtual reality (VR) and blockchain. I expect this to be a boon for these metaverse stocks to buy.
Significant advancements in hardware and networking are enhancing user experiences in the metaverse. Companies are developing more advanced VR/AR headsets, haptic devices and sensors to improve realism in virtual environments.
Furthermore, metaverse stocks extend beyond simple worlds for gamers. Governments and corporations are heavily investing in the metaverse. Governments are exploring metaverse applications for public services and international relations, such as Barbados establishing a virtual embassy.
All these factors and more point towards July as being a great time for investing $500 into these smart metaverse stocks. Here are some companies to consider.
Roblox (RBLX)
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Roblox (NYSE:RBLX) is a popular platform for creating and sharing games and experiences, making it a frontrunner in the metaverse space.
The company is well-positioned for continued growth, as evidenced by its strong Q1 2024 results. Revenue increased 22% year-over-year (YOY) to $801 million, while bookings rose 19% to $924 million. The company achieved a record free cash flow of $191 million, up 133% from the prior year.
User engagement metrics are impressive, with average daily active users (DAUs) of 77.7 million — up 17% YOY — and hours engaged of 16.7 billion — up 15%.
Although Roblox is not yet profitable, it is showing operating leverage as headcount and capital expenditures moderate. The company has a solid balance sheet with $2.5 billion in liquidity.
At a market cap of $25 billion and an enterprise value to bookings multiple around 8x, Roblox’s valuation appears reasonable given its growth trajectory. The average analyst price target of $41.05 suggests upside potential from current levels. That makes it one of those smart metaverse stocks.
Autodesk (ADSK)
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Autodesk (NASDAQ:ADSK) is known for its 2D and 3D design software, used in various industries, including architecture and engineering.
The company delivered impressive Q1 FY2025 results, with revenue growing 12% YOY to $1.42 billion. The company is seeing strong momentum across its product portfolio and geographies. Recurring revenue, which represents 97% of the total, provides great visibility.
Margins are expanding as Autodesk gains operating leverage. Non-GAAP operating margin increased 3 percentage points to 35%. Free cash flow was a solid $487 million. Management raised full-year guidance for billings, revenue, operating margin and free cash flow.
Trading at 30x forward earnings, ADSK’s valuation is reasonable given its growth prospects, high recurring revenue and profitability profile. The average analyst price target of $265.89 implies 8% upside.
Its software, ready for use in other industries, also diversifies its potential customer base. This, in my view, is attractive, making ADSK one of those smart metaverse stocks for investors.
Shopify (SHOP)
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Shopify (NYSE:SHOP) is integrating metaverse capabilities into its e-commerce platform, allowing businesses to create virtual storefronts and sell NFTs.
Its merchants can create and sell unique virtual items like digital art, clothing and accessories within metaverse platforms. Digital fashion items and avatar customization accessories are popular virtual products.
Shopify demonstrated robust revenue growth last quarter, with a 23% YOY increase in Q1 2024, reaching $1.9 billion. The company’s gross profit also saw a significant increase of 33% YOY. Moreover, Shopify’s financial forecasts are promising, with analysts projecting an average price target of $75.63, representing a potential upside of 15.27% from the current price.
I think SHOP could be one of those smart metaverse stocks for investors to consider if they have a sum of $500 to invest in a young and innovative company. The intersection between the metaverse and commerce will continue to run deeper as time goes on.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed 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.
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