By Jack Denton
Translation: Laura Markus
Tech stock prices are down. Some of the most popular and well-known growth companies, including Meta, Netflix, Coinbase and others, have suffered the most. But a team of Citigroup analysts led by Andre Lin still sees an opportunity.
“Metaverse is the most popular of all tech trending words,” the team wrote in a report this week. The shares, which have lost up to 50 percent of their market value this year, were not advised to sell.
Instead, “falling stock prices increase the option value of the Metaverse,” the report said.
End the bear market: Wall Street bets on Metaverse stocks.
In March, Citigroup said the Metaverse and a new version of the Internet called Web3 could be worth $13 trillion. Citigroup has selected ten companies in four categories, as well as a few other stocks to watch.
Citigroup remains bullish on the Metaverse. The concept that the Internet of the future will consist of interactive spaces and virtual worlds, while still in its infancy, has “potentially far-reaching implications for key players”.
However, Lin’s team also admitted that “some industry experts feel the Metaverse is hype with little content and little value to users.”
The analyst group believes five fundamental and investable technologies underpin the Metaverse: operating systems; Blockchain protocols (using cryptocurrencies and NFTs as the “lubricant” of the digital economy); simple user interfaces such as voice control; immersive reality headsets; and computer infrastructure.
While the Citigroup team points to 47 stocks in categories such as hardware, chips and telecom, it sees platforms and software as the biggest opportunities for use in the metaverse.
According to their assessment, Meta has a high level of engagement with its Metaverse platforms and virtual reality headsets. The same goes for immersive gaming platform Roblox, 3D engine group Unity Software and Southeast Asian augmented reality group WIR ASIA.
Tech giant Microsoft and Chinese tech and gaming giants Tencent and NetEase have medium Metaverse exposure for platforms and software, as does Sony for tech hardware.
In terms of chips, Nvidia’s commitment to the Metaverse with its industrial “Omniverse” applications is rated average. The same goes for Taiwanese graphics card manufacturer Micro-Star in the server category.
There are also a number of investment ideas with lower exposure to Metaverse that Citigroup believes fit the Metaverse. These include Apple, with its virtual reality headsets and vast digital network; Intel, Qualcomm and Advanced Micro Devices (AMD) in the area of processors; Verizon, T-Mobile US and AT&T with their mobile networks and Ericsson and Nokia with their network devices.
Notification of Conflicts of Interest:
The CEO and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has taken direct and indirect positions on the following financial instruments mentioned in the publication or related derivatives that may benefit from any price development resulting from the publication: Apple, AT&T , Nvidia.