Major tech companies could invest tens of billions of dollars in the metaverse over the coming years to the benefit of tech-adjacent businesses.
In an analysis of the potential impacts on global markets, Nuveen CIO Saira Malik described the metaverse as the next wave in computing following decades of progress from mainframes to mobiles.
“We don’t think the potential large size of the metaverse is debatable, however the debate is around how and when it will become mainstream,” she said.
“Our confidence around the legitimacy of the size of the metaverse is supported by the billions that tech giants are investing in the future given that the mobile computing age (iPhone) is 15 years old.”
Ms Malik said that companies including Meta, Apple, Google and Microsoft could invest $50 billion or more into the development of the metaverse over the next five years, with investments increasing further as new technologies and experiences gain momentum.
“While it is too soon to decide who the ultimate winners will be, investments in those companies directly tied to the metaverse look most promising,” she said.
These include semiconductor companies, semiconductor capital equipment companies, digital content creators and technology platforms.
Ms Malik suggested that the metaverse would likely centre around the widespread adoption of augmented reality (AR) and virtual reality (VR).
“We view the metaverse as a catchall term for the next wave of interactive computing that further blurs the lines between ‘real life’ and a virtual world,” Ms Malik said.
“Building on the basics of Zoom and FaceTime, the metaverse is a truly immersive experience that will enable people to feel like they are actually in a room together rather than interacting on a screen.”
Despite the ongoing metaverse hype, Meta reported weaker than expected fourth quarter results last week that sent its share price tumbling.
“Meta CEO Mark Zuckerberg may be keen to coax the world into an alternate reality, but disappointing fourth quarter results were quick to burst his metaverse bubble,” said Hargreaves Lansdown equity analyst Laura Hoy.
