Expert insights from BlackRock Fundamental Equities

Step into the metaverse


Feb 5, 2022 | FOR PROFESSIONAL CLIENTS, QUALIFIED CLIENTS AND QUALIFIED INVESTORS ONLY

Key points

01

A whole new world

Major technology companies have made it clear that the metaverse is the next frontier of the digital world.

02

Why now?

Next-generation hardware such as augmented reality glasses, accelerated digitalization, and wider use of cryptocurrencies.

03

Investing in the future

The metaverse isn’t a reality for most people yet. But the investment opportunities are here now.

The power of engagement

Technology and internet companies – as well as consumer brands and marketing companies – are laser-focused on one key goal: engagement. Today, advertisements are shown to people globally who spend an average of more than two hours a day on social media, according to GlobalWebIndex. Tech and consumer companies believe this amount of time could multiply many times in the metaverse, having enormous revenue implications for companies selling adverts and consumer goods.

A giant leap into the metaverse

Momentum of “metaverse” mentions in company transcripts vs. other themes

Source: Morgan Stanley, Nov. 2021. The chart shows the speed at which mentions of select technological themes in global company transcripts reached “peak interest.” A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular.

The screen’s the limit

Virtual worlds already exist, but they are limited by old technology where a two-dimensional screen is the limiting factor

Why now? Three reasons

We see three reasons behind metaverse momentum: next-generation hardware, COVID-accelerated digitalization, and wider use of cryptocurrencies

Investment opportunities

Initial opportunities might be found in companies that will supply components for – and assemble – the next-generation hardware such as augmented-reality glasses

Consumers in the metaverse

We believe that consumer brands that embrace the metaverse today will capture the attention of younger generations in decades to come.

Risk warnings

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