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 where Adobe Inc. (NASDAQ:ADBE) stands among other Metaverse stocks picked 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: 107
Adobe Inc. (NASDAQ:ADBE) is one of the world's largest and most diversified software companies focused on changing the world through personalized digital experiences. The company empowers everyone to imagine, create and bring any digital experience to life. Adobe was founded in 1982 by John Warnock and Charles Geschke. The company is divided into three divisions, including digital media, publishing, and advertising.
Many of Adobe's existing products, such as Photoshop, Illustrator, After Effects, Premiere Pro, and Dimension, are commonly used to create digital content. The company has dominated the 2D content creation market, but in 2022 it has released a series of new software tools aimed at supporting 3D content creation for the Metaverse. That same year, Adobe Acrobat announced its entry into the metaverse with the introduction of immersive features. Create, share, and e-sign documents directly from any Meta Quest device. Adobe described the move as a new frontier in remote work and collaboration.
At the same time, Adobe is updating Adobe Substance 3D, its software suite for 3D content creation, with new plugins and a 3D Materials SDK for developers to create Metaverse with powerful 3D and immersive experiences. has evolved.
Adobe Inc. (NASDAQ:ADBE) managed to achieve record revenue in Q3 2024. The company's revenue for the quarter was $5.41 billion, an increase of 11% year over year. It also generated cash flow of over $2 billion. Digital Media segment revenue increased 11% year-over-year and Digital Experience segment revenue increased 10% year-over-year. Management was optimistic about future growth prospects given the large market the company is currently catalyzing.
For more than 40 years, Adobe Inc. (NASDAQ:ADBE) has been changing the world through digital experiences, pursuing a mission of making the digital world a place where everyone can participate and benefit. I think it's a natural evolution of that. mission. The company ranks on hedge funds' list of the top 10 Metaverse stocks to buy.
Overall, ADBE ranks #6 on hedge funds' list of other best Metaverse stocks to buy. While we appreciate ADBE'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 ADBE 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.
