Morgan Stanley sees the metaverse as a massive $8 trillion market

Here Are Morgan Stanley’s Top Stock Picks For Investing In The Metaverse (FB)

TOPLINE According to Morgan Stanley, since Facebook's recent name change and new focus on the "metaverse," there has been massive interest in the concept of a virtual world that could replace today's internet—which means a massive new opportunity for investors.

Morgan Stanley believes the metaverse will become the "next generation social media, streaming, and gaming platform," with an $8 trillion addressable market.

For analyst Brian Nowak, the metaverse, like current digital platforms, will initially and primarily operate as an advertising and e-commerce platform for offline products and purchases.

Morgan Stanley sees the metaverse as a massive $8 trillion market

Meta-facebook

The firm's most obvious stock pick in this space is Meta (formerly Facebook). This is owing to the firm's core business's long-term growth and strong free cash flow, even as it invests billions of dollars to "build the next generation version of social networking."

Morgan Stanley analysts also like the gaming company Roblox, which they believe can combine the metaverse's advertising and e-commerce opportunities with its 47 million daily active users and "strong" monetization algorithms.

The firm has identified several other stocks that it believes will benefit from the growing adoption of the metaverse concept, including those focused on augmented reality, such as Alphabet's parent company Google and social media platform Snap.

 

It also likes Unity Software, the most widely used engine in the video game industry, which, according to the company, could help with content creation for the metaverse.

Last month, Facebook rebranded to Meta, signalling the company's new focus on the metaverse, a vision for a virtual world accessible via headsets or smartphones where people can work, play, and socialise. Though the metaverse is still largely theoretical, the possibilities are limitless, with the idea being that there could be many different types of virtual worlds that could revolutionise how people interact. While Facebook is ahead of the curve in this area, other companies, such as Microsoft and Disney, have begun to invest in the metaverse.

Mark Zuckerberg's statement on the Metaverse

Facebook CEO Mark Zuckerberg said last month when he announced the company’s rebranding to Meta. "We believe the Metaverse will be the successor to the mobile internet," he said.