What happened
The metaverse produced some real-world gains for investors on Monday. Shares in companies already active in the space, or likely to be so, rose notably on the day following a team of analysts’ very bullish take on the industry. Bellwether stock Meta Platforms ( FB 4.02% ) posted a 4% increase, Apple ( AAPL 2.37% ) advanced by nearly 2.4%, and Roblox ( RBLX 8.69% ) surged ahead by 8.6%.
So what
On Friday, a group of Citigroup ( C 0.90% ) analysts published a nearly 200-page report on the metaverse. In it, the analysts estimate that the total addressable market of this ecosystem could total $8 trillion to $13 trillion. For perspective, that would be more than double the market cap of Meta Platforms, Apple, and Roblox combined.
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Much of this will be driven by pure volume. The Citigroup analysts estimate the number of potential denizens in the metaverse will range from 1 billion to 5 billion. That wide range comes down to how exactly one defines “metaverse,” which doesn’t yet have a fixed, widely accepted definition.
But this vast potential doesn’t mean Meta Platforms, Apple, and Roblox can simply sit back and let the big bucks flow in. The report cautioned, “The lags, packet drops, and network unreliability witnessed in today’s world makes the current state of the infrastructure unsuitable for building an envisioned metaverse experience.”
Now what
Of the three companies, Roblox is the most advanced in terms of metaverse functionality, as it is already renowned as a home to a great many virtual worlds where users can interact and transact. This might be a leading reason why it jumped ahead more than Meta Platforms and Apple stock on Monday.
Regardless, those who buy Citigroup’s argument and financial projection would do well to put money in any, or even all, of the three stocks. All are certain to benefit if they can lead in the metaverse and it becomes widely adopted by users.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
