In this article we present the list of 10 Stocks That Will Own the Metaverse.
Meta Platforms, Inc. (NASDAQ:META), NVIDIA Corporation (NASDAQ:NVDA), and Alphabet Inc. (NASDAQ:GOOG) are three companies the smart money is betting big on that should one day own the metaverse, which has the potential to be one of the most lucrative ventures in human history.
There’s no simple way to define what the metaverse is or will be, but a broad definition could describe it as a collection of virtual worlds in which people interact with each other through avatars. And while the delivery mechanisms could be many, a true metaverse experience is seen as one which will use VR headsets, sensors, and haptic feedback to completely immerse the user in a 3D world.
While the metaverse is most commonly associated with gaming, it has the potential to transform and play a role in nearly every facet of our lives, from how we work and conduct business, to how we socialize, consume entertainment, and spend our money. Rudimentary examples of metaverses already exist, primarily in the form of gaming type experiences like Roblox (primarily because of the presence of live events on the platform, which other online games like Fortnite have also hosted) and Meta Platforms’ Horizon Worlds (a more focused, though early-stage attempt at a true metaverse experience).
What differentiates a metaverse from a traditional online video game, which otherwise has many of the same elements, is the broad real-life applications that a metaverse could offer. Socializing, work, education, live events, or conducting metaverse-related business all figure to feature prominently in these worlds. Entire economies are expected to spring up within these worlds that will actually lead to real-world, but metaverse-based jobs, such as game designers, visual architects, and fashion designers, and virtual land owners (and landlords?).
We’re already seeing some astounding prices being paid for virtual property in games like The Sandbox, where more than $1 million was spent on virtual land so those owners could digitally live near Snoop Dogg. As more and more celebrities and influencers start heading into the metaverse, these scenarios will continue to magnify, with people spending huge sums to live near celebrities and making large sums if they can get celebrities to endorse their metaverse clothing or other creations.
It’s that kind of real-world imitating economic backdrop, and the ability to otherwise conduct actual real-world business through the platform that has prognosticators so excited about the growth potential and future scope of the metaverse, which could be worth trillions of dollars.
While the extreme ends of that growth aren’t likely to be felt any time soon, as the technology simply isn’t there yet (and likely won’t be for many years to come) to create a truly immersive metaverse, the market is nonetheless expected to grow at a very impressive 39.4% CAGR through 2030.
If you believe in the long-term growth potential of the metaverse and are looking for some stocks to invest in that should be among the leaders in the space, you’ve come to the right place. The following list of top metaverse stocks is based on the latest shareholder data from a collection of some of the best investors in the world.
Photo by mahdis mousavi on Unsplash
Our Methodology
The following metaverse stocks are ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q2 2022 reporting period.
10 VR Stocks That Will Own the Metaverse
10. Unity Software Inc. (NYSE:U)
Number of Hedge Fund Shareholders: 23
Meta Platforms, Inc. (NASDAQ:META), NVIDIA Corporation (NASDAQ:NVDA), and Alphabet Inc. (NASDAQ:GOOG) are three names most likely to own the metaverse in the years and decades to come. Another company that will have a big role to play in the metavolution is Unity Software Inc. (NYSE:U).
With gaming and immersive graphical experiences being core to the metaverse experience, 3D development platforms like Unity Software Inc. (NYSE:U)’s will be key to building the backbone and eye candy that will shape our digital futures. Unity is already making money from such endeavors, in addition to standard video games, pulling in $617 million in revenue in the first half of this year. The company is poised to merge with app monetization company ironSource, with a shareholder vote on the issue taking place on October 7. That should give the company and its content creators even more effective means of making money from their creations, be they meta-related or otherwise.
Unity Software Inc. (NYSE:U) crashed to a new low in hedge fund ownership during Q2 following a 41% drop in the number of funds long the stock. Greg Eisner’s Engineers Gate Manager and Nehal Chopra’s Ratan Capital Group were some of the funds that sold out of Unity during the second quarter. Jim Davidson, Dave Roux, and Glenn Hutchins’ Silver Lake Partners has more than 10% exposure to Unity in its 13F portfolio, owning just under 35 million shares.
The ClearBridge Investments All Cap Growth Strategy was buying shares of Unity Software Inc. (NYSE:U) during the first quarter, explaining why in its Q1 2022 investor letter:
“We took advantage of a correction in higher-multiple stocks early in the first quarter to purchase shares of Unity Software (NYSE:U), a leading platform to create, run and monetize 3D content. With about 1.6 million monthly active creators versus roughly 15 million potential content creators in gaming alone, we believe the company’s Create Engine is still underpenetrated relative to its core addressable market. We similarly see a long runway for growth in Unity’s Operate Solutions segment given its advertising network commands single-digit share of the $60 billion mobile app install ad market today. Furthermore, we believe Unity is well-positioned to expand its addressable market to include industries beyond gaming, on both the operate and create sides of their business (Exhibit 1). The company is not yet free cash flow positive but given strong net expansion rates and high gross margins, we see a path to improving profitability over time, with management notably targeting positive free cash flow this fiscal year.”
9. Sony Group Corporation (NYSE:SONY)
Number of Hedge Fund Shareholders: 26
Japanese electronics giant Sony Group Corporation (NYSE:SONY) is one of the biggest players in the metaverse at this point given the traction that its PlayStation-based VR headset has achieved, selling over 4 million copies worldwide. Sony recently partnered with English Premier League club Manchester City to recreate that team’s football stadium in the metaverse. Sony also sells sensors and other imaging technology that could be utilized by other companies engaged in the development of metaverse experiences.
26 of the hedge funds that are tracked by Insider Monkey’s database were long Sony Group Corporation (NYSE:SONY) on June 30, up 30% from three quarters earlier. Ben Jacobs’ Anomaly Capital Management initiated a position of 1.65 million Sony shares during Q2, giving its 13F portfolio 6.81% exposure to the company.
Cooper Investors discussed Sony Group Corporation (NYSE:SONY)’s role in the burgeoning music rights landscape in the fund’s Q4 2021 investor letter:
“In recent years we have observed a growing market for music rights which represent another way for owners of record labels and music libraries like portfolio holdings Warner Music Group and Sony (via its subsidiary Sony Music, ~25% of our estimated enterprise value) to deploy capital, grow their businesses and create value for shareholders.
In the first few days of 2022 Warner closed a deal to acquire David Bowie’s back catalogue for about US$250m which follows on from Bruce Springsteen’s catalogue sale to Sony for upwards of US$500m and Bob Dylan’s sale to Universal Music for a similar amount.
The trend in demand for music copyrights is clearly strengthening, with competition for these assets coming from traditional music companies (Warner, Sony) as well as specialist investors and private equity…” (Click here to see the full text)
8. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Shareholders: 38
Roblox Corporation (NYSE:RBLX)’s eponymous mobile game is one of the earliest examples of a metaverse in action, as the game features a collection of virtual worlds and activities created by millions of different content creators that can then be engaged with by players, a small number of whom exist within the environment at the same time and can interact with one another. Players can also buy fashion items and accessories for their avatars, allowing them to develop a unique look that sets them apart from other players’ avatars.
In addition to the millions of standard game and hangout rooms, Roblox has also played host to several live events, including live concert experiences from renowned artists like The Chainsmokers. However, the limitations and annoyances of the Roblox platform can somewhat obscure the immense promise of what the metaverse could be, as you’re constantly bombarded with popup ads and gaudy in-experience ads trying to sell you stuff at all times. Despite that, Roblox had nearly 60 million daily active users in September, showing how popular shared virtual worlds not only could be, but already are.
Hedge funds have bailed on Roblox Corporation (NYSE:RBLX) over the past two quarters, pushing ownership of the stock down by 38%. Some of the eponymous game’s biggest bulls were doubling down on the stock during Q2 however, as Jim Simons’ Renaissance Technologies, Cathie Wood’s ARK Investment Management, and Ken Griffin’s Citadel Investment Management all raised their stakes in the company. The three funds own more than $750 million in RBLX shares as of June 30.
Jefferies Group discussed Roblox Corporation (NYSE:RBLX)’s potential opportunities and pitfalls with its Metaverse game in the fund’s Q3 2021 investor letter:
“If we look at the Metaverse concept with more lenient guidelines for interoperability, then it becomes easier to see why certain companies are being referred to as Metaverse. On the virtual side, we’d point to companies like Epic Games, TakeTwo and Roblox. In augmented reality, it would be Niantic and SNAP. These are the large capitalized players in the space but albeit, not the only ones. We expect new mulit-billion dollar companies will rise as the
Metaverse becomes more mature.
Roblox is a good example. The content is almost entirely user generated, the engine that powers the developer studio is provided by Roblox and developers/creators share in almost all the money that users spend on the platform. In addition, many of the items that you purchase in the avatar marketplace, or even a branded experience like Vans World, can be taken across experiences. Roblox talks a lot about platform extension, which would move the platform beyond just gaming/leisure experiences and into education and workplace offerings. The developer community has the capability to build tools for other developers, there are professional studios being built on the platform and many consumer-facing brands/content are partnering with Roblox to ensure a virtual presence. Roblox actually has a lot of the pieces for our utopian definition of Metaverse, but things like technology, interoperability with outside platforms and a dynamic, two-way economy are what’s missing. However, given our thesis that full interoperability is somewhat unrealistic, it’s easy to see how Roblox fits the definition…
Many already consider RBLX a Metaverse, or at least an early iteration of one, and here’s why. The platform offers all the tools required for content creation in a low-code / no code format and handles publication, language translations, billing, collections, safety and security of the environment and more. It’s hard to find a platform that makes the creative process easier for developers than Roblox; we see this as very supportive of creator economy.
The content is almost entirely user generated and developers/creators share in almost all the money that users spend on the platform. The developer community has the capability to build tools for other developers, there are professional studios being built on the platform and many consumer-facing brands/content are partnering with Roblox to ensure a virtual presence. Roblox talks a lot about platform extension, which would move the platform beyond just gaming/leisure experiences and into education and workplace offerings. Lastly, many of the items that you purchase in the avatar marketplace, or even a branded experience like Vans World, can be taken across experiences. In essence, the RBLX ecosystem includes creator economy, a virtual platform, picks and shovels of the Metaverse and some interoperability – many of the key enablers for Metaverse.
However, there’s always work to be done. We would expect to see a more dynamic economy emerge with resale moving beyond limited items and premium members, particularly with newer gaming models such as play-to-earn. Increasingly, gamers are going to want some return for the time and money invested on a platform. Advancements in technology will allow for truly shared experiences among a larger and larger group of people. We remain skeptical on the reality of interoperability; RBLX could very well end up being one of many Metaverses.”
7. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Shareholders: 66
Chipmaker Intel Corporation (NASDAQ:INTC) will be another major player powering the metaverse in the future. Yet while the company is optimistic about its potential, it also believes we’re a long way away from true metaverse experiences, where thousands or even millions of people could all exist within the same shared world at the same time rather than being walled off into tiny instances of a world that support only a limited number of users.
In an editorial posted to the company’s website, Intel Corporation (NASDAQ:INTC) senior vice president and head of the company’s Accelerated Computing Systems and Graphics Group, Raja Koduri, believes we’ll need to achieve a 1,000-fold increase in computing power before true metaverses will be possible.
For its part, Intel is going all-in on chipmaking again, perhaps with an eye on owning the metaverse, as the company recently announced plans to spin off its autonomous driving unit Mobileye.
Hedge fund ownership of Intel Corporation (NASDAQ:INTC) has fallen by 23% since peaking at the end of the first quarter of 2021, including one of its steepest drops in smart money ownership during Q2. David Einhorn’s Greenlight Capital and Rob Citrone’s Discovery Capital Management were two prominent hedge funds that sold out of Intel during the quarter.
Baron Funds explained why Intel Corporation (NASDAQ:INTC) has failed to perform like some of its dot-com era peers in the fund’s Q2 2022 investor letter:
“Then, there is the case of Intel Corporation (NASDAQ:INTC). A blue-chip tech champion with a market capitalization of over $500 billion in early 2000, the stock was trading at a P/E multiple of 42. It was a fast-growing company whose stock price and multiple declined more or less in line with its peers. However, unlike Google, Intel’s net income has grown from $7.3 billion in 1999 to $19.9 billion in 2021, a compounded annual growth rate of just 4.7%. Its growth from the dot com era has not proven to be durable, and Intel has yet to trade at the price it attained in 1999.”
6. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Shareholders: 71
Closing out the first half of the list is another chipmaker, QUALCOMM Incorporated (NASDAQ:QCOM). While the company is best known for powering many of the world’s mobile devices with its Snapdragon processors, it’s angling to be one of the leading players in the metaverse as well. The company recently partnered with Meta Platforms to build novel VR and AR experiences utilizing custom Snapdragon XR platforms.
QUALCOMM Incorporated (NASDAQ:QCOM)’s venture capital arm has also deployed $100 million into a Metaverse fund to support the development of the metaverse ecosystem, specifically those that use the company’s XR platform. Those experiences won’t just be gaming-related, but will instead encompass everything from the health and wellness field, to education and entertainment.
Hedge fund ownership of QUALCOMM Incorporated (NASDAQ:QCOM) is also down by 23% from its peak, which was achieved in the third quarter of 2020. There’s also been a decline in smart money shareholders of QCOM during six of the past seven quarters. Michael Rockefeller and Karl Kroeker’s Woodline Partners and Paul Tudor Jones’ Tudor Investment Corp are among the funds that sold off their Qualcomm holdings during Q2.
The ClearBridge Investments Large Cap Value Strategy likes QUALCOMM Incorporated (NASDAQ:QCOM) opportunity to expand out from its strong mobile base, as outlined in the fund’s Q4 2021 investor letter:
“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker Qualcomm, which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”
Meta Platforms, Inc. (NASDAQ:META), NVIDIA Corporation (NASDAQ:NVDA), and Alphabet Inc. (NASDAQ:GOOG) will be major metaverse players in the decades to come. See where they rank among hedge funds today by clicking the link below.
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Shareholders: 84
The second half of the list kicks off with another prominent chipmaker, NVIDIA Corporation (NASDAQ:NVDA), the world’s leading GPU maker. Nvidia is partnering with Pixar, Adobe, Siemens, and other companies to expand Pixar’s Universal Scene Description (USD) into a 3D platform that can support industrial metaverse applications related to architecture, engineering, robotics, and manufacturing.
Nvidia’s Omniverse platform, which is based on USD, allows developers to simulate large scale worlds that can be used to test ideas, train AI, and perform virtual testing through the use of digital twins. Ericsson is one of many leading companies that use the Omniverse platform, in its case to optimize the deployment of 5G, another field that Qualcomm is a major player in.
Hedge fund ownership of NVIDIA Corporation (NASDAQ:NVDA) is down by 24% over the past two quarters after soaring in the fourth quarter of 2021. It remains relatively in line with smart money ownership of the stock over the past three years. Ken Fisher’s Fisher Asset Management owns a $1.15 billion stake in Nvidia as of June 30, holding 7.59 million shares of the company in its 13F portfolio.
The Baron Fifth Avenue Growth Fund shared some of the investor concerns around NVIDIA Corporation (NASDAQ:NVDA), as well as outlining the company’s ongoing strengths in its Q2 2022 investor letter:
“At the company-specific level, there was a broad correction across the entire portfolio. While four of our holdings contributed to performance, the contribution to absolute returns was less than 100bps combined, as unfortunately none of them were large enough to move the needle. We had 16 investments detracting over 100bps each with NVIDIA (NASDAQ:NVDA), our second largest detractor, costing the Fund 254bps.
NVIDIA’s stock was hit even harder, down 44.4%, impacted by concerns over the health of the consumer, dramatic declines in crypto, and COVID-related lockdowns in China. Despite the sell-off and the increased near-term volatility in its gaming business, NVIDIA’s revenues grew 46% year-over-year with 48% operating margins, driven by continued strength in its data center business as companies across industries adopt AI and ML…” (Click here to see the full text)
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Shareholders: 88
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s Radeon GPUs account for about 13.7% of all GPU sales, with particularly strong representation in laptops. The company is also making inroads in the discrete graphics market, slowly eating into Nvidia’s dominant position in that space.
Meta Platforms is also collaborating with AMD in its efforts to build out the metaverse, though not in the way one might envision. Instead, the social media giant will use AMD’s Xilinx Zynq UltraScale RFSoC radio chip to build cheaper Evenstar radio units, which Meta Platforms is looking to deploy aggressively to expand broadband coverage around the world and connect more people to the metaverse.
Unlike most other chipmakers, which hedge funds have shied away from in recent quarters, ownership of Advanced Micro Devices, Inc. (NASDAQ:AMD) has jumped by 26% over the past two quarters to hit an all-time high. Karl Richter’s Sora Investors and Josh Resnick’s Jericho Capital Asset Management were among the many funds to initiate positions in AMD during Q2.
The Baron Opportunity Fund likes the steps Advanced Micro Devices, Inc. (NASDAQ:AMD) has taken to gain share in the PC market and expand its data center capabilities, as detailed in the fund’s Q2 2022 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global fabless semiconductor company focusing on high-performance computing technology, software, and products. AMD designs leading high-performance central and graphics processing units (known as CPUs and GPUs) and integrates them with hardware and software to build differentiated solutions for customers.
AMD has been gaining meaningful share in personal computing and server end markets over the past several years driven by the performance of its processors and technology and strong execution against its technology roadmap, and we believe share gains will continue over the coming years from a combination of AMD’s continued advancements and Intel’s stumbles in developing its leading-edge technology.
Additionally, the recently closed acquisitions of Xilinx and Pensando enhance AMD’s positioning within the data center, a key growth engine for the semiconductor industry, and Xilinx specifically opens up several new growth opportunities in new end markets like industrial, automotive, and communications. The company also generates significant cash flow, giving it capital allocation optionality for further M&A and returning capital to shareholders.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Shareholders: 188
Meta Platforms, Inc. (NASDAQ:META) has a clear vision for how the metaverse could revolutionize many aspects of life and is spending (and losing) billions of dollars to bring that vision to reality. The company bought Oculus for $2 billion way back in 2014 with a clear eye on the importance of VR headsets for experiencing virtual worlds.
Meta has since launched Horizon Worlds, its free-to-play VR experience that shows off an early example of what future metaverse experiences could be like. The game is a cross between Roblox-style experiences and a social MMO, though the rudimentary graphics have failed to inspire much interest as yet. Meta hopes to improve the graphical fidelity with the release of a more powerful headset, which could also include sensors and cameras that accurately reflect real-world expressions on the player’s in-game avatar.
Meta Platforms, Inc. (NASDAQ:META) has experienced a hedge fund exodus in recent quarters, losing a net total of 32% of its former smart money shareholders over the past year. Other funds have looked at the extreme weakness in META shares (down 60% this year) as a buying opportunity, as evidenced by Jim Simons’ Renaissance Technologies upping its stake in Meta by 83% during Q2 to 5.49 million shares.
Harding Loevner also believes Meta Platforms, Inc. (NASDAQ:META)’s shares are worth buying at current levels, given the strong cash flow generated by the company, as it shared in its Q2 2022 investor letter:
“Any discussion of Q2 underperformance is incomplete without addressing two FAANG stocks. We do not share the market’s concerns about growth prospects at Facebook, Meta Platforms, Inc. (NASDAQ:META)’s core social media platform. Yes, growth is moderating as the business matures. There is also work to be done on technical workarounds to repair the damage to earnings growth from privacy changes implemented by Apple that impair Facebook’s ad targeting to iPhone users. But Meta’s digital advertising model still generates an extremely attractive rate of return on investment for the merchants it serves. Once its Apple workarounds are complete, we expect growth through market share gains and addressable market expansion to resume. Despite all the hyped new initiatives and skirmishes with rivals, Facebook remains an immensely free cash flow-generative business with huge advantages in putting its cash to work developing direct consumer relationships and monetizing them through targeted advertising. CEO Mark Zuckerberg has noted on multiple occasions how the company’s returns from its significant investments in AI have been even higher than it expected, in terms of driving higher revenue and lower costs. We view Meta shares as a bargain today, trading at 15 times earnings after over US$10 billion in annual expenditures on its Metaverse investments.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Shareholders (Class A): 191
Number of Hedge Fund Shareholders (Class C): 153
Search and tech giant Alphabet Inc. (NASDAQ:GOOG) has its own plans for metaverse domination, which will be supported by the company’s huge base of Android gamers. Alphabet is reportedly working on new VR technology that may use its Android OS as a base. The company has also been developing augmented reality technology for years, which is used on Google Maps.
Alphabet has also deployed a small fraction of its enormous war chest to buy up smaller companies in the VR/AR fields in recent years, including Eyefluence, which has developed eye tracking technology for use with AR/VR applications, and VR game developer Owlchemy Labs.
Overall hedge fund ownership of Alphabet Inc. (NASDAQ:GOOG) is slightly off its peak reached two quarters earlier, but remains exceptionally high. Among the hedge funds tracked by Insider Monkey’s database, there are 10 long positions in Alphabet valued at more than $1 billion, with Ken Griffin’s Citadel Investment Group and Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital holding two each.
Lakehouse Capital remains bullish on Alphabet Inc. (NASDAQ:GOOG)’s growth opportunities and ability to control costs, as revealed in its July 2022 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) reported another strong quarterly result despite the tough macroeconomic conditions. Revenue increased by 13% as Search proved resilient, primarily led by strength in the travel and retail verticals. YouTube advertising growth was lighter and moderated due to a tough comparison period and a general softening in brand advertising spend. That said, YouTube’s user engagement and time spent still continues to grow which bodes well for future monetisation opportunities. Google Cloud outpaced the company’s overall growth with revenue increasing by 36% and while it has yet to show any signs of profitability, we remain supportive of Alphabet continuing to reinvest in its cloud business given the size of the market opportunity ahead. On the cost front, the company added another 10,000 employees during the quarter, but notably, the CFO mentioned that hiring will likely slow down over the next twelve months as the company focuses on greater operating efficiency. Overall, we’re pleased with how the company has performed and are confident that management will be able to control costs, if or when the economic environment becomes more challenging.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Shareholders: 262
Topping the list is Microsoft Corporation (NASDAQ:MSFT), another major tech giant and AR/VR player. The company’s HoloLens mixed reality (AR/VR) headsets incorporate eye tracking, hand tracking, and spatial tracking, and are being utilized by the U.S. military for field tests. It’s unclear when a commercial version of the headsets will be available, but they are coming.
Microsoft has also added metaverse functionality to its Microsoft Teams work collaboration platform in the form of Mesh, which allows employees from far-flung regions of the world to interact with each other through digital avatars in a virtual reality space where they can engage and collaborate in a more immersive and enjoyable way.
Hedge fund ownership of Microsoft Corporation (NASDAQ:MSFT) is up by more than 200% since 2013 thanks to the stellar leadership of Satya Nadella, who took over the reins from Steve Ballmer in 2014 and built the company into a cash generating force through its intelligent cloud and productivity services. Ken Fisher’s Fisher Asset Management owns 28.7 million MSFT shares on June 30, valued at $7.37 billion at that time.
L1 Capital International didn’t hold anything back in its glowing assessment of Microsoft Corporation (NASDAQ:MSFT) as the “most advantageously positioned business globally for long term success”, as it shared in its Q2 2022 investor letter:
“Saving the best for last, Microsoft Corporation (NASDAQ:MSFT) is the most advantageously positioned business globally for long term success. Powered by sustained growth drivers including cloud computing, security, data analytics, collaboration, artificial intelligence, automation, business productivity, low-code programming and gaming, amongst others.
No company is ‘macro immune’ as Microsoft’s management has recently explicitly noted, but the business is defensive.
Despite its immense size, Microsoft has more than doubled revenue over the past 5 years and will approach US$200 billion in financial year 2022, while EPS will have compounded at over 20% over this period. To be clear we do not expect this rate of growth to continue, but we do expect Microsoft to deliver healthy growth in revenue, earnings and cashflow despite challenging economic conditions. Meanwhile Microsoft retains a AAA-rated balance sheet, one of only two companies globally to hold the highest credit rating. We expect dividends and buybacks to consistently increase as Microsoft has limited other sensible ways to deploy its excess cashflow, particularly in an environment where proposed acquisitions will be under intense regulatory scrutiny…” (Click here to read the full text)
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Disclosure: None. 10 Stocks That Will Own the Metaverse is originally published at Insider Monkey.
