11 Most Promising Metaverse Stocks To Buy According To Hedge Funds

In this piece, we will take a look at the 11 most promising metaverse stocks to buy according to hedge funds.

The metaverse is a new technological sector that aims to transport humans into the digital realm. Ever since the personal computer became popular in the 1990s, and 3D graphics cards started to make their way into the market during the same time period, humans have used a virtual experience for their entertainment in the form of video games. In fact, the global video game market is worth a whopping $224 billion as of 2022 end, and it is estimated to grow at a compounded annual growth rate (CAGR) of 10.5% to be worth $610 billion by 2032. Safe to say, digital experiences are here to stay, and as technology advances, they are also evolving with time.

While traditional video games limit a player to looking at a screen or using a headset, the metaverse seeks to transport them into the digital realm. While there are several different definitions for a metaverse, the simplest is that it is a 3D environment that allows people to have lifelike, yet digital, experiences. The metaverse caught the public attention during the coronavirus pandemic, as people were forced indoors and had to work and play from home.

This growth in consumer interest did not go unnoticed by the finance industry and investors. Data from Crunchbase shows that in 2021, metaverse companies doubled their capital raises to $10 billion. This figure further blossomed in 2022 when $120 billion flew into the sector during the first eight months of the year according to data from the consulting firm McKinsey. And despite the general pessimism in the industry surrounding the technology, McKinsey is also quite optimistic about the metaverse’s future as it expects that the sector can generate as much as $5 trillion in value by 2030.

Building on the flow of investments in 2022, 2023 has been a busy year for the metaverse. There are few companies right now with the software and computing power to operate such a platform, and one of these is the San Mateo, California based video game developer Roblox Corporation (NYSE:RBLX). Roblox made a splash in November 2023 when it announced its Roblox Connect platform. Through Roblox Connect, Roblox players will be able to call and communicate with their friends in the digital realm. This is a unique service, and the announcement also appears to have a positive impact on the firm’s shares that have struggled in 2023. Between January and the end of the first week of November, Roblox’s shares lost 16%, but since it announced Roblox Connect, the stock is up by a healthy 17% to mark 6% in year to date gains.

Any mention of the metaverse is incomplete without talking about Meta Platforms, Inc. (NASDAQ:META), the only big tech mega cap company that is extremely bullish on the metaverse. Meta’s CEO and founder Mark Zuckerberg has piled in $36 billion into the metaverse, but so far, the money has yielded little results. Nevertheless, its scale does allow it to break in new markets, and Meta’s launch of the Quest 3 virtual reality headset in October did stimulate the declining VR market to an extent. However, data from CNBC shows that as of late November, VR headset sales in America dropped to $664 million for a 40% drop. Seems like the metaverse will take some time to catch up with users.

Commenting on the Quest and the metaverse, here’s what the Meta chief had to say during the firm’s latest earnings call:

Now finally, in addition to AI, our other major long-term focus is the metaverse. And we just launched Quest 3, our most powerful headset yet, at a very competitive price.

We packed a lot of improvements in there, including a next generation chipset with 2x the graphics performance, our best display as yet, and a form factor that’s 40% thinner than Quest 2. But the most important breakthrough for Quest 3 is that it’s the first mainstream mixed reality device. And that means that when you put on the device, you see your physical room around you, and you can bring digital objects and games into your physical space, whether that’s a ping pong table, your workstation, a big screen TV to play Xbox games on, or your friends as holograms. The early reviews have been great, and it’s been fun to see how people respond to this. We also launched the next generation of Ray-Ban Meta smart glasses. They’re upgraded from the first generation in basically every way.

Better camera, clearer audio, they’re lighter, they have more styles, and you can now even live stream video from them. But most importantly, these are the first smart glasses shipping with Meta AI built in. So you can ask your glasses questions throughout the day. It’ll answer them right in your ear. And in many ways, glasses are the ideal form factor for an AI device because they enable your AI assistant to see what you see and hear what you hear. Again, it’s good to see the early reviews, they’re so positive, and I’m looking forward to this space evolving quickly over the coming years. We are also making progress on software for the metaverse too. Horizon is now growing faster. There’s more new worlds like Super Rumble and Citadel come online.

Today we’ll look at some promising metaverse stocks according to hedge funds with the notable picks being Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT).

A patient wearing a virtual reality headset, experiencing the immersive world of virtualized healthcare.

Our Methodology

As part of the process of compiling the most promising metaverse stocks according to hedge funds, we ranked the top 30 holdings of the Roundhill Ball Metaverse ETF by the number of hedge funds that had bought their shares during Q3 2023 and picked the top stocks.

11 Most Promising Metaverse Stocks To Buy According To Hedge Funds

11. ASML Holding N.V. (NASDAQ:ASML)

Number of Hedge Fund Investors In Q3 2023: 57

ASML Holding N.V. (NASDAQ:ASML) is the only company in the world capable of making high end chip manufacturing machines, making it indispensable to powering up the metaverse. The shares are rated Buy on average but the analyst average share price prices a downside since it has a value of $686.17.

During Q3 2023, 57 out of the 910 hedge funds covered by Insider Monkey’s research were the firm’s shareholders. ASML Holding N.V. (NASDAQ:ASML)’s largest shareholder is Ken Fisher’s Fisher Asset Management due to its $2.8 billion investment.

Just like Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT), ASML Holding N.V. (NASDAQ:ASML) is a top hedge fund metaverse stock pick.

10. QUALCOMM Incorporated (NASDAQ:QCOM)

Number of Hedge Fund Investors In Q3 2023: 67

QUALCOMM Incorporated (NASDAQ:QCOM) is a semiconductor company whose GPUs power smartphones and AR headsets. The firm was at the center of a rather strange analyst note from Morgan Stanley in December 2023 that saw the bank downgrade QUALCOMM Incorporated (NASDAQ:QCOM)’s shares to Hold from Strong Buy but increase the share price target to $132 from $119.

Insider Monkey dug through 910 hedge funds for their September quarter of 2023 shareholdings and found 67 QUALCOMM Incorporated (NASDAQ:QCOM) investors. John Overdeck and David Siegel’s Two Sigma Advisors was the firm’s biggest investor as it owned a $362 million stake.

9. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Investors In Q3 2023: 89

The Walt Disney Company (NYSE:DIS) is a well known global entertainment company that operates theme parks and video streaming services. While the firm eliminated its entire metaverse division earlier this year, its Disney+ service offers immersive 3D experiences.

During this year’s third quarter, 89 out of the 910 hedge funds profiled by Insider Monkey had held a stake in the company. The Walt Disney Company (NYSE:DIS)’s largest shareholder is Nelson Peltz’s Trian Partners due to its $2.6 billion investment.

8. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Investors In Q3 2023: 107

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest contract chip manufacturer. It is a key beneficiary of any positive developments in the metaverse industry since whether it’s Qualcomm or NVIDIA, both have to go to TSMC to make their semiconductors.

As Q3 2023 ended, 107 out of the 910 hedge funds part of Insider Monkey’s database were Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s shareholders. Out of these, the biggest investor was Ken Fisher’s Fisher Asset Management as it owned 30 million shares that are worth $2.6 billion.

7. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Investors In Q3 2023: 110

Advanced Micro Devices, Inc. (NASDAQ:AMD) is a GPU designer whose products are essential to powering up digital experiences. The firm’s shares are rated Strong Buy on average and analysts have set an average share price target of $139.44.

Insider Monkey’s third quarter of 2023 research of 910 hedge funds revealed that 110 were the firm’s investors. Advanced Micro Devices, Inc. (NASDAQ:AMD)’s largest shareholder is Ken Fisher’s Fisher Asset Management since it holds a $2.8 billion stake.

6. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Investors In Q3 2023: 134

Apple Inc. (NASDAQ:AAPL) is the biggest technology company in the world and its Vision Pro headset literally transports a person inside a computer to interact with apps in real time. These days though the firm is in a bit of trouble as a patent dispute has forced it to stop selling some products in the U.S.

During September 2023, 134 out of the 910 hedge funds surveyed by Insider Monkey had bought and owned Apple Inc. (NASDAQ:AAPL)’s shares. Warren Buffett’s Berkshire Hathaway was the biggest stakeholder through a massive $156 billion stake.

Meta Platforms, Inc. (NASDAQ:META), Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT) are some metaverse stocks on the hedge fund radar.

5. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Investors In Q3 2023: 180

NVIDIA Corporation (NASDAQ:NVDA)’s GPUs, like AMD and QUALCOMM’s products, are also essential to powering up the metaverse. Courtesy of the hype surrounding artificial intelligence, it has been one of the best performing stocks this year by having posted more than 240% in year to date gains.

By the end of September 2023, 180 out of the 910 hedge funds profiled by Insider Monkey were NVIDIA Corporation (NASDAQ:NVDA)’s shareholders. Rajiv Jain’s GQG Partners was the biggest shareholder since it owned 14 million shares that are worth $6.1 billion.

4. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Investors In Q3 2023: 221

Alphabet Inc. (NASDAQ:GOOGL) is a diversified technology company courtesy of its Google business division. 2023 has been an eventful year for the firm when it comes to the metaverse as it has teamed up with a blockhain based metaverse company and introduced AR beauty products.

After digging through 910 hedge funds for their September quarter of 2023 shareholdings, Insider Monkey discovered that 221 had invested in the firm. Alphabet Inc. (NASDAQ:GOOGL)’s largest investor in our database is Ken Fisher’s Fisher Asset Management due to its $5.7 billion investment.

3. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Investors In Q3 2023: 234

Meta Platforms, Inc. (NASDAQ:META) is the most bullish company on the metaverse as should be evident by its name. However, these plans appear to be geared for the long term, as its metaverse division Reality Labs has lost tens of billions of dollars since being set up in 2019.

During Q3 2023, 234 out of the 910 hedge funds surveyed by Insider Monkey were Meta Platforms, Inc. (NASDAQ:META)’s shareholders. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital owned the biggest stake which was worth $3.4 billion.

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Investors In Q3 2023: 286

Amazon.com, Inc. (NASDAQ:AMZN) is an eCommerce and cloud computing company that is an un intuitive stock when it comes to the metaverse. However, the firm is one of the few in the industry that offers industrial grade metaverses that allow for virtual events, networking, and making 3D models.

By the end of this year’s third quarter, 286 out of the 910 hedge funds covered by Insider Monkey’s research had held a stake in the company. Amazon.com, Inc. (NASDAQ:AMZN)’s largest investor is Ken Fisher’s Fisher Asset Management due to its $5.2 billion stake.

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Investors In Q3 2023: 306

Microsoft Corporation (NASDAQ:MSFT) is a technology behemoth with sizeable personal and cloud computing business divisions. Like Amazon, it is also focusing on industrial metaverses, and not only does it have a co innovation program for developing metaverse applications but it also announced a slew of upgrades to Teams that rely on the technology in November 2023.

306 out of the 910 hedge funds surveyed by Insider Monkey during Q3 2023 were Microsoft Corporation (NASDAQ:MSFT)’s shareholders. Michael Larson’s Bill & Melinda Gates Foundation Trust was the biggest shareholder due to its $12.4 billion stake.

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Disclosure: None. 11 Most Promising Metaverse Stocks To Buy According To Hedge Funds is originally published on Insider Monkey.