How Disney, Intel, and Other Old Reliables Stand to Gain From the Metaverse

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The Metaverse has been called the Web 3.0 and the next generation of the Internet.

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dream time

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You Might Want to Buy Walt Disney Stocks,

Cisco Systems,
And Intel if you believe in the metaverse.

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This may seem counterintuitive as the metaverse overtakes those tech and media giants. The idea is that consumers and businesses will interact on new virtual reality platforms—playing video games, socializing, and doing business with each other. Some have dubbed it Web 3.0.

The re-invention of Facebook as a meta platform (ticker: FB) highlights this trend. But a lot of tech, media, and e-commerce companies stand to benefit, according to a new Metaverse index of stocks from Bespoke Investment Group.

“Many players will be involved in the development of the Metaverse,” Bespoke said in a report on Tuesday. “This ‘next generation Internet’ will require cloud infrastructure, data processing, content origination, cyber security and more.”

As Bespoke sees it, 30 companies offer exposure to the trend spread across seven broad categories: content production, virtualization software, cyber security, e-commerce, advertising, hardware and data.

If the concept takes off a few names will be clear winners: Meta Platform, Roblox (RBLX), Nvidia (NVDA), Activision Blizzard (ATVI), Take-Two Interactive (TTWO), and Unity Software (U), a virtual-reality software platform.

In addition to Nvidia, several chip makers made the cut, including Broadcom (AVGO), Advanced Micro Devices (AMD) and Taiwan Semiconductor (TSM).

Coinbase (COIN), a large cryptocurrency exchange, could also benefit. “Digital assets and currencies can have real value through the use of non-fungible tokens (NFTs),” Bespoke said, noting that Coinbase launched an NFT platform not too long ago.

Other index components include Microsoft (MSFT), Cisco (CSCO), Intel (INTC), and tech and media giants such as Walt Disney (DIS), and Alphabet (GOOGL).

In early November, Microsoft Announced an “Aries” platform For online work using holographic technology. Cisco is developing a holographic system for meetings. Bespoke said Intel is working on chips designed to be 1,000 times faster than today’s processors. Alphabet, for its part, has a hand in everything from digital advertising to augmented-reality hardware.

As for Disney, it’s trying to make Metaverse concepts into theme parks. The company also has entertainment content and gaming assets that could gain traction in the new virtual world.

Some other winners are not so clear. Bespoke sees that consulting giant Accenture (ACN) is benefiting from “uncertainty” as companies struggle to digitize and implement metaverse strategies. Cognizant Technology Solutions (CTSH), another technology outsourcing firm, may play a role as companies implement metaverse strategies.

More under-the-radar winners include Emerson (IMMR), a touch-feedback technology company; Matterport (MTTR), a specialized-data software platform; and Okta (OKTA), an identity-management and corporate app platform.

Investors need not buy these shares separately. You can find many of the bespoke index components in the SPDR Technology Select Sector SPDR Exchange-Traded Fund (XLK). Indeed, the bespoke Metaverse Index has outperformed ETFs and the broader tech sector this year, although it has outperformed the S&P 500.

The Roundhill Metaverse ETF (META) holds many of these stocks, as well as others such as Amazon.com (AMZN), Tencent Holdings (700.HK), and Qualcomm (QCOM). It has also outperformed the tech sector and the broader S&P 500 since its June 30 launch.

Investors seem to love the concept overall — Meta’s shares are up 7% since the company announced its rebranding on October 28 to beat the broader tech market.

But high valuations are now built into companies with even metaverse exposure. With a view to boosting enthusiasm, crores of companies are mentioning it in earnings calls and meetings with analysts.

Charming as the metaverse may be, it remains an aspiration of Silicon Valley, sensitive to the hype that comes with dreaming big.

Write to Darren Fonda at [email protected]

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