The Metaverse is one of the fastest-growing industries in the world. The metaverse market size is expected to grow to $803.1 billion at a 39.68% CAGR. One of the reasons for this growth is the metaverse’s ability to provide novel, interactive experiences across different industries.
The U.S. economy is doing well post-pandemic. Policymaker’s big spending approach to the pandemic early has contributed to increasing the deficit and inflation. However, it is also responsible for one of the strongest labor markets we’ve ever seen. As a result, the U.S.A. has outdone its global peers in total labor productivity per employee post-pandemic.
With a strong U.S. labor market, now is the time to invest in the metaverse. Here are the best metaverse stocks to buy in July.
Autodesk (ADSK)
Autodesk (NASDAQ:ADSK) is a software company that develops proprietary 3D modeling services and products. Yahoo! Finance reports 21 analysts predicting a 1-year price range on ADSK between $225.00 and $310.00, with a mean of $270.62.
ADSK has shown strong revenue generation and profitability for Q1 2024. Revenue has grown 11.66% YOY and its net profit margin has grown 40.11% YOY. The company even shows signs of being undervalued as a current WACC of 9.1% but an ROIC of 13.6% presents an opportunity to gain on investment for investors.
Autodesk has acquired Wonder Dynamics, a company that focuses on 3D cloud animation and VFX solutions through AI-powered tools. These tools lower artists’ workload on Autodesk platforms, allowing them to further their creativity and improve the Autodesk platform experience for artists. Autodesk has also changed its management structure, with previous CFO, Deborah Clifford, stepping down and Elizabeth Rafael being appointed in the interim. This decision came after an internal audit surprisingly discovered that “certain decisions” concerning discretionary spending and accounts payable resulted in decreased profitability. Autodesk is one of the best metaverse stocks for investors this July.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) is a company that designs and manufactures semiconductors and wireless technology services. Yahoo! Finance reports 23 analysts predicting a 1-year price range on QCOM between $123.59 and $252.81, with a mean of $182.32.
QCOM presented robust financials for Q1 2024. The company was able to beat EPS and revenue expectations for Q1 2024, making it the third consecutive quarter of EPS and revenue surprises. Free cash flow has grown markedly to an astonishing 377.28% YOY increase, making a case for QCOM’s strong profitability beyond EPS.
QCOM furthers its partnership with Meta Platforms (NYSE:META) by optimizing “Meta Llama 3 large language models” significantly on cell phones, VR/AR headsets, PCs and more devices on the Qualcomm Snapdragon platform. This greatly improves the user experience and efficiency of AI applications on Qualcomm devices.
With regards to the Metaverse, Qualcomm is ramping up development of its new “XR2 gen 3” VR GPU chips. The flagship chip is rumored to be capable of 4k resolution. While the Apple Vision Pro offers this as well, the products with the “XR2 gen 3” could offer similar capabilities at a massively discounted price. Strengthening ties to Meta and the development of a powerful VR chip with market-changing potential make QCOM one of the best metaverse stocks.
Adobe (ADBE)
Adobe (NASDAQ:ADBE) is a leading software company that specializes in digital media and marketing. The company’s investment into AI features with its strong subscription model has helped with its success.
The company reported $5.31 billion in revenue in its Q2 earnings call, beating many analysts’ expectations alongside a 10% YOY increase. Profitability was outstanding with an 88.24% gross profit margin. in comparison to the sector median gross profit margin of 49.41%.
Adobe’s investment in AI has been evident with its recent partnership with Microsoft. Specifically, this collaboration improves efficiency among marketing teams by utilizing Microsoft’s (NASDAQ:MSFT) Copilot AI. The company also unveiled new product features, enhancing personalization and engagement through the use of AI tools. Additionally, Adobe’s Creative Cloud subscription services contribute to a steady stream of income, reaching 33 million paid subscribers at the start of 2024.
This subscription model ensures a predictable revenue model and enhances financial stability. Moreover, Morningstar analysts believe that this stock is undervalued with a predicted annual growth rate of 11%. Coupled with its advancements in AI and the robust subscription framework, Adobe is one of the best metaverse stocks on the market right now.
On the date of publication, Matthew Rodrigues did not hold (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.
