Meta Platforms (META) founder and CEO Mark Zuckerberg appeared on CNBC’s Jim Cramer show last
week. His appearance might signal very low interest from investors in the metaverse. Instead of dealing
with the advertising revenue slowdown from Apple’s (AAPL) higher privacy settings, declining activity on
Facebook and Instagram, and a lower stock price, Meta is investing billions in the platform.
Meta must overcome the skepticism of markets. It will ignore the stock price, which trades at a P/E of 12
times. It has more than enough cash to invest in Oculus headsets. In the next year, the firm will have at
least four headsets on the market.
Metaverse is a catchy fad that will develop in the next few years. People need entertainment beyond
games on mobile devices or consoles on television. Currently, demand for Oculus is weak. Last year,
Meta sold only a few million units.
Investors building a metaverse portfolio should consider Unity Software (U) and Roblox (RBLX). Unity has
a powerful gaming engine that speeds up product development. Roblox has an immersive gaming
environment that appeals to young children.
Take-Two (TTWO) and Electronic Arts (EA) already command a high market capitalization. They depend
on the console and PC market, which is mature. Growth investors should embrace companies that plan
for a product’s future in the metaverse.