Summary
- The Metaverse is a 3D virtual space created on the Internet
- It enables the same level of activities as in the real world in a virtual space
- The IT and software industries are leading the way in entering the Metaverse
The term "metaverse" is used to describe a virtual space built on a network in general.
On October 28, Facebook changed its name to "Meta," reminiscent of the Metaverse. The focus of attention is only growing.
This post will introduce the basic information about the Metaverse and the related stocks recommended for investment.
- Differences between the Metaverse and conventional virtual spaces
- Examples of services that fall under the Metaverse
- Facebook is also focusing on the Metaverse
Why is the Metaverse attracting attention?
- Digitalization of communication methods
- Advances in VR technology
- Impact of the NFT bubble
- Nvidia
- Intel
- Micron
- TSMC
- Marvell
- Samsung
What is the Metaverse?
Metaverse is a 3D virtual space created on the Internet, coined from the words "meta" (super) and "universe" (cosmos).
It is said to have originated from the novel "Snow Crash," published by science fiction writer Neal Stephenson in 1992.
What is particularly noteworthy about the Metaverse is that communication and economic activities can be carried out in virtual space just as in the real world.
With the Metaverse development, worlds previously only experienced in games and science fiction can become more familiar.
"It's like the virtual world called OZ that appeared in the movie "Summer Wars" coming to life!"
Differences between the Metaverse and conventional virtual spaces
Although there have been home video game consoles that utilize virtual spaces, the Metaverse has some differences.
The conditions that apply to the Metaverse are as follows
- Have a three-dimensional simulation space (environment)
- There is an object (avatar) for self-projection
- Multiple avatars can share the same three-dimensional space.
- Objects (items) can be created in the space.
However, what is particularly important is that anyone can share and move the same virtual world at any time.
Therefore, a game that allows you to create your storyline is not a metaverse.
Examples of services that fall under the Metaverse
- Fortnite
- The Sandbox
Fortnite has the aspect of a metaverse because it allows many users to interact in the same virtual space through avatars.
The Sandbox is a representative service of the Metaverse that allows users to buy or rent land (LAND) in the virtual space and create original games and characters.
Recently, the service has been gaining attention as an NFT game and is also famous for cryptocurrency investment.
Facebook is also focusing on the Metaverse
Facebook changed its name to "Meta" on October 28, 2021, which was a big deal in the metaverse community.
The name change was that the previous name, Facebook, was only a part of the business and was not appropriate to describe the entire range of services offered by the company.
The new company name "Meta" indicates that the company focuses on social networking services and the metaverse domain using VR technology.
"There will be no change in the names of social networking sites such as Facebook and Instagram, and they will continue to exist, Wang!"
Why is the Metaverse attracting attention?
There are three reasons why the Metaverse is attracting attention.
- Digitalization of communication methods
- Advances in VR technology
- Impact of the NFT bubble
(1) Digitalization of communication methods
The new coronavirus has reduced the number of opportunities for people to go out, which has led to the rapid digitization of communication.
As a result, the Metaverse attracts attention to events similar to those in reality, even in virtual spaces.
One of the great strengths of the Metaverse is that it can be used to increase opportunities for interaction and trading without the need for face-to-face interaction.
As an alternative to real events, the use of the Metaverse will become even more widespread in the future.
"Sanrio will hold its first virtual music live and other metaverse events in December of 2021!"
(2) Advances in VR technology
The advancement of VR technology is also a significant reason why the Metaverse attracts attention.
Two possible factors are as follows.
- Lightening of VR devices
- Advances in VR content development technology
As VR goggles have become lighter and more wireless, it has become easier to communicate more naturally.
In addition, progress in the development of Unity and other developer tools has increased the supply of VR content, another factor that has attracted attention to virtual space services.
"The evolution of VR devices will expand their use in fields such as medicine!"
(3) Impact of the NFT bubble
As a reason for the growing interest in the Metaverse, the impact of the NFT bubble cannot be overlooked.
NFT is a kind of certificate of ownership of assets in digital form. It is increasingly being used in the Metaverse.
The combination of the Metaverse and NFT has recently made it possible to trade expensive digital art, known as NFT art, securely.
It is expected that even more large-scale economic activities will be conducted through the virtual space of the Metaverse in the future.
6 Metaverse-related stocks
The display mechanism needs to change dramatically to be genuinely immersive in the Metaverse.
This is because the Metaverse display needs to be placed close to the consumer's eyes, not far away like a traditional screen.
In addition to these design challenges, the display must be smaller, consume less power, have a wider field of view, have higher resolution, higher refresh rates, and higher brightness levels to achieve optimal performance.
These innovations are necessary for the Metaverse to reach its full commercial potential.
There are many opportunities for companies with an advantageous position to benefit.
Below are some stocks that focus on assembly, display, passive, and semiconductors. (Market cap order)
1. Nvidia
- Markets Insider
- Ticker: NVDA
- Market cap: $608 billion
- Price target: $400
- Subsector: Semiconductor
- Theme: "Enables AI applications, compute TAM at 10-15% CAGR + Nvidia DCG to outgrow." − John Pitzer
- Source: Credit Suisse
2. Intel
- Markets Insider
- Ticker: INTC
- Market cap: $195 billion
- Price target: $70
- Subsector: Semiconductor
- Theme: "Stronger server demand and stable PC from WFH, SFH, online everything." − John Pitzer
- Source: Credit Suisse
3. Micron
- Markets Insider
- Ticker: MU
- Market cap: $91 billion
- Price target: $130
- Subsector: Semiconductor
- Theme: "Memory content moving structurally higher." − John Pitzer
- Source: Credit Suisse
4. TSMC
- MarketWatch
- Ticker: 2330 TT
- Market cap: $593 billion
- Price target: NT$800
- Subsector: Semiconductor
- Theme: "HPC (40% of sales), smartphone (40-45%), and IoT business to benefit." − Randy Abrams
- Source: Credit Suisse
5. Marvell
- Markets Insider
- Ticker: MRVL
- Market cap: $59 billion
- Price target: $105
- Subsector: Semiconductor
- Theme: "Outsized exposures in 5G, datacenter, Cloud, and Accelerated compute." − John Pitzer
- Source: Credit Suisse
6. Samsung
- MarketWatch
- Ticker: 005930 KS
- Market cap: $369 billion
- Price target: ₩115,000
- Subsector: Display/Semiconductor
- Theme: "Memory supplier to the infrastructure equipment." − Keon Han
- Source: Credit Suisse
The Future World of the Metaverse
The development of the Metaverse will make it possible to do the following
- Significantly increase work efficiency
- Information can be delivered quickly
- It will be easier to enjoy extraordinary experiences
Eliminate the need for travel costs and physical space to provide value more cheaply and quickly.
In addition, you will be able to enjoy entertainment such as live music, flying, and other experiences that are not possible in reality daily.
"The potential is to have experiences online that are as good as, or better than, the real world!"
Summary
In this post, I have explained the basic information about the current hot topic of the Metaverse, including the reasons why it is attracting attention and related issues.
Finally, I will summarize the three most essential points in this post
- The Metaverse is a 3D virtual space created on the Internet
- It enables the same level of activities as in the real world in a virtual space
- The IT and software industries are leading the way in entering the Metaverse
It may not be long before the Metaverse technology replaces what exists in reality in virtual space.
Let's continue to pay attention to topics related to the Metaverse, which has infinite possibilities.
