Since Facebook’s recent name change and the new focus on the “Metaverse”, there has been massive interest in the concept of a virtual world that could replace today’s Internet – and according to Morgan Stanley, this represents a huge new opportunity for investors.
Wall Street firm Morgan Stanley sees the Metaverse as a $ 8 trillion addressable market that is likely to become the “next generation social media, streaming, and gaming platform.”
“Like current digital platforms, we expect the Metaverse to function primarily as an advertising and e-commerce platform for offline products / purchases,” wrote analyst Brian Nowak.
The company’s most obvious stock pick in this space is Meta (formerly Facebook), thanks to the steadfast growth of its core business and strong free cash flow despite investing billions of dollars to “build the next generation of social networking.”
Morgan Stanley analysts also like the gaming company Roblox, which can leverage its 47 million daily active users and “strong” monetization algorithms with the advertising and e-commerce capabilities of the Metaverse.
The company selected several other stocks that it believes could benefit from the increasing adoption of the Metaverse concept, including those focused on augmented reality like Google parent Alphabet and social media platform Snap .
It also likes Unity Software, the most widely used engine in the video game industry, which the company says might be able to help create content for the Metaverse.