We recently compiled a list of the 10 best Metaverse stocks to buy by hedge funds. In this article, we'll take a look at how Microsoft Corporation (NASDAQ:MSFT) stands compared to other top Metaverse stocks to buy by hedge funds.
According to McKinsey & Company, the Metaverse is an emerging 3D-enabled technology that uses virtual reality, augmented reality, and other advanced Internet and semiconductor technologies to enable people to have lifelike experiences online. It's a digital space.
Fundamental features of the Metaverse include immersion, real-time interactivity, and user agency. Meanwhile, the full vision of the Metaverse includes platforms and devices that work seamlessly with each other, the potential for thousands of people to interact simultaneously, and use cases that go far beyond gaming. This phenomenon gained attention in 2021, with internet searches for the term increasing by 7,200%, and it appears to be here to stay. With the introduction of lockdowns and work-from-home policies, interest in shared virtual environments has skyrocketed. The opportunity remains enormous, with the Metaverse potentially creating up to $5 trillion in value by 2030.
When technology guru Mark Zuckerberg renamed Facebook to Meta in 2021, he was clearly pushing the Metaverse narrative in the world. Visions of a digital future for work and recreation briefly made headlines, but other emerging technologies such as artificial intelligence have since dominated the headlines.
Questions have also been raised about whether Zuckerberg should have turned his successful social media company into a VR venture. In September 2023, the BBC reported that his company's virtual reality and augmented reality arm, Reality Labs, had lost $21 billion year-on-year. The company then introduced social virtual reality space Horizon Worlds. While some users complain that there aren't enough people to enjoy it, the platform's monthly user numbers are nowhere near the number of people who use social media like Facebook and Instagram every day.
Although the company's VR headsets and Horizon Worlds have yet to break into the mainstream three years after its founding, experts argue that Metaverse is still as relevant as ever. are. On October 2, CNBC reported that Zuckerberg's metaverse is finally showing signs of life, as his company may have found a foothold in VR and AR through another medium: smart glasses. . After the company found early success in the smart glasses market through its partnership with Ray-Ban, the CEO unveiled Orion, the first “fully functional” AR glasses prototype, in September.
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“The right way to look at Orion is as a time machine. These glasses exist, and they give us a glimpse into a wonderful and very exciting future.”
While there may be a lack of connection between the Metaverse, which became the next big thing two years ago, and the general AI-dominated technology landscape, reports of its death are “overhyped”. ” and some argue that it is quite long. A term concept that materializes as a digital future for the masses.
With that said, let's move on to the 10 best Metaverse stocks to buy, according to hedge funds.
Our methodology:
To create our list of the 10 best Metaverse stocks to buy according to hedge funds, we first created an expanded list of relevant companies using stock screeners, ETFs, and online rankings. We then shortlisted the top 10 stocks with the highest number of hedge fund holders from the list. Top 10 Best Metaverse Stocks to Buy by Hedge Funds, ordered by ascending hedge fund holders as of Q2 2024.
Here at Insider Monkey we're obsessed with hedge fund stocks. The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
Number of hedge fund holders: 279
Microsoft Corporation (NASDAQ:MSFT) helps people and organizations achieve more with technology. The segments are Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Although the company is best known for its software products, it also has a strong presence in other emerging sectors.
Microsoft was one of the first companies to jump into the Metaverse race with its HoloLens mixed reality headset. Although the company has discontinued production of the HoloLens 2 headset, it is still in the competition. Microsoft decided to create a metaverse within Teams through Microsoft Mesh. It powers 3D immersive experiences using next-generation technology that makes virtual connections look like in-person interactions.
Mesh has been available on PC and Meta Quest VR devices, but it was announced that it will be generally available in Microsoft Teams in January 2024. Previously, Mesh avatars opened the door to the workplace metaverse in Teams. Customers such as Accenture, BP, and Mercy Ships are already reaping the benefits of Mesh. Additionally, Microsoft acquired Activision Blizzard, a leader in game development and interactive entertainment content publisher. The company saw this move as a step toward growing its gaming business across mobile, PC, console, and cloud while providing the building blocks of the Metaverse.
In the first quarter of 2025, Microsoft Corporation (NASDAQ:MSFT) posted revenue of $65.6 billion, up 16% year over year. The company is off to a strong start to the fiscal year, driven by continued strength in Microsoft Cloud, where revenue exceeded $38.9 billion. Productivity and Business Processes revenue increased 12% year over year, Intelligent Cloud revenue increased 20% and More Personal Computing revenue increased 17%. At the same time, the company's AI business is on track to exceed a $10 billion annual revenue run rate in the next quarter.
While the end of HoloLens 2 may diminish the hardware side of Microsoft's presence in the Metaverse, Microsoft's expertise in gaming and cloud is proven and expected to foster the company's foothold in the Metaverse. I am. Microsoft Corporation (NASDAQ:MSFT) is ranked among the 10 best Metaverse stocks to buy, according to hedge funds. As of Q2 2024, the stock is held by 279 hedge funds.
Overall, MSFT ranks #1 on hedge funds' list of other best Metaverse stocks to buy. While we appreciate MSFT's potential as an investment, we believe some AI stocks have a better chance of delivering higher returns over shorter time periods. If you're looking for AI stocks that are more promising than MSFT but trade at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: BlackRock's 8 Best Widemot Stocks to Buy Now and 30 Most Important AI Stocks.
Disclosure: None. This article was originally published on Insider Monkey.
