Top Line

According to Morgan Stanley, ever since Facebook’s recent name change and new focus on the ‘metaverse’, there has been enormous interest in the concept of virtual worlds that could replace today’s internet – and what it means for investors. There is a big new opportunity.

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Wall Street firm Morgan Stanley sees the metaverse as an $8 trillion addressable market that has the potential to become “the next generation of social media, streaming and gaming platforms.”

“Like existing digital platforms, we expect Metaverse to initially and primarily serve as an advertising and e-commerce platform for offline products/purchases,” wrote analyst Brian Nowak.

The firm’s most obvious stock pick in this space is Meta (formerly Facebook), thanks to the growth sustainability of its core business and strong free cash flow, even as it spends billions to “build the next generation version of social networking”. invests dollars.

Morgan Stanley analysts also like gaming company Roblox, which says it can take advantage of its 47 million daily active users and “robust” monetization algorithms with the Metaverse’s advertising and e-commerce opportunities.

The firm picked out a number of other stocks it thinks could benefit from adopting the Metaverse concept, with a focus on augmented reality such as Google-parent Alphabet and social media platform Snap.

It also favors Unity Software, the most widely used engine in the video game industry, which according to the firm could be in a position to help with content creation for the Metaverse.

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