Web3 stocks stole the spotlight in 2021 but rapidly disappeared from the scene. Today, many decry Web3 stocks and their ilk like metaverse stocks as mere byproducts of the ZIRP era. While that argument isn’t wrong, it also isn’t right. Like many sectors that explode and then come crashing down – cannabis stocks, space stocks, etc. – Web3 stocks were just too early. In cases like these, we see initial enthusiasm bubble over rapidly before many realize the company’s goals are years down the road. Then, investors rapidly exit and bring high valuations back down to earth.

And that’s where opportunity lies.

As with any overblown industry fallen out of favor, Web3 stocks have a viable future. It’s just not a short-term play. If you can pick stocks that will survive until their day comes due, you’ll be positioned to capture the upside within those companies and the industry as a whole.

Farfetch (FTCH)

Farfetch (NYSE:FTCH) is a digital marketplace selling luxury clothes. But, unlike other online retailers, it’s focused on Web3 opportunities. Last year the company picked eight Web3 fashion companies to work with as part of its accelerator program. The company intended the accelerator to spark “next-wave thinking” in digital fashion. Startups included archival preservation, immersive digital fashion shows and more.

As with most Web3 hot stocks, FTCH is in the gutter today. Frankly, FTCH is a penny stock and trades well below its 2021 high of $70. But that could represent opportunity, as this week the company founder began teasing a move towards either acquisition or privatization. The move isn’t bullish overall since it’s coming on the heels of prior investors like Richemont (OTCMKTS:CFRUY) refusing to plunge more cash into the company.

But this represents an arbitrage opportunity. Shares trade well below book value. So, even if a private company buys Farfetch for a discount, it’ll likely be valued higher than current per-share pricing.

Applied Digital (APLD)

Applied Digital (NASDAQ:APLD) is a major Web3 stock that differs from others. Instead of diving into Web3 tech or offering consumer-facing solutions, Applied Digital sells the picks and shovels to Web3 gold miners. The company builds, owns and operates a range of massive data centers across North America. The sheer size and scope of its next-gen digital infrastructure offer turnkey diversification. Yes, the company’s data solutions are necessary to scale Web3 enterprises. But Applied Digital also captures substantial upside from blockchain and artificial intelligence tech.

Data center expansion is costly, particularly upfront, as capital expenditures are high when building infrastructure. Thus far, APLD is perennially unprofitable. But, when you zoom out, the company’s financials are on a solid trajectory. Over the past five quarters, APLD’s revenue climbed while its net loss has shrunk. This shows that sales are solid as the company finds spending equilibrium, as it can attract customers to newly established data centers.

Veritone (VERI)

Veritone (NASDAQ:VERI) made news this week as the Web3 stock got pulled into the emergent “Generative AI Center of Excellence,” an Amazon (NASDAQ:AMZN) initiative. That makes Veritone a hot AI stock, but the company’s core value proposition lies in its Web3 potential.

Veritone owns and operates Veriverse, which operates as a B2B and B2C platform for intellectual property owners. Intellectual property rights, plagiarism and more took center stage in the past few years as generative AI raised concerns about digital theft. And, as more companies enter the (projected) $13 trillion industry, digital theft concerns will continue increasing. As a first mover towards combating that trend, Veritone stands to gain the most if it can maintain solvency while markets catch up to the future Web3 trend.

Solvency is concerning, as the company consistently posts a quarterly net loss of around $20 million. But the firm does hold a decent chunk of cash in its coffers, giving it a runway of at least a year. If rates come down, or Veritone can find outside equity investors to raise cash, the company stands to be one of the biggest winners of Web3.

On the date of publication, Jeremy Flint did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.