Amid disappointing performances by growth stocks this year, including plenty of previously beloved names, it’s easy for investors to sour on disruptive themes, including the metaverse.
On the other hand, the metaverse investment thesis is still in its infancy, indicating that 2022 struggles by growth stocks with metaverse exposure could be providing investors with an ideal opportunity to evaluate exchange traded funds such as the Fidelity Metaverse ETF (FMET).
Roughly four months old, FMET is fresh on the metaverse ETF scene, but with time, it could prove to be one of 2022’s more well-timed rookie ETFs. Various metaverse forecasts confirm as much.
“Already, popular consumer brands have started using these platforms and the race for creating their presence in the Metaverse has begun in earnest. The Metaverse market size is estimated at $40-60 billion in 2021 and expected to reach around $8-13 trillion by 2030, according to major investment banks like Goldman Sachs, Morgan Stanley and Citibank,” according to MoneyControl.
Numbers like those, particularly the latter set, imply the metaverse is a vast, sprawling opportunity for companies. That says companies operating in this space need capital and scale, which are boxes checked by many FMET components.
“Currently, numerous technology companies are contributing to the Metaverse. From the well-known Big Tech companies to lesser-known companies working on AR/VR or immersive technologies, including devices, gaming, hardware, specialised chips, cloud, artificial intelligence, blockchain, payments technologies, digital marketing, networking, and cyber security, all provide exposure to the Metaverse growth vector,” reported MoneyControl.
Those concepts are in the wheelhouses of FMET holdings, including Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL), and Meta Platforms (NASDAQ:META). Tencent (OTC:TCEHY), China’s biggest internet company and FMET’s largest holding at a weight of nearly 5%, is another tech behemoth with significant metaverse potential. Add to that, some analysts see the shares as inexpensive.
“Tencent has the resources and a unique collection of marketing channels to try out business models to eventually reach compliance, and their portfolio of games may only be just the beginning. We see a tremendous amount of untapped potential in messaging app, WeChat, where compliance means monetization of a billion-plus user base,” said Morningstar analyst Andrew Willis.
Bottom line: To adequately tap into the myriad opportunities present in the metaverse investing landscape, a broad approach is needed. FMET delivers that to investors.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
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