Meta recognizes it, but we think they already have a highly profitable business to sustain its ambitious foray into the metaverse. It will be costly and tremendously challenging to execute. ( from Bloomberg article) Between Roblox and Meta, Who Can Build The Next Computing Platform? diversify future revenue streams, cement its position in the next computing platform, and potentially rewrite its company narrative going forward. has already invested more heavily in the field than many people realize. Meta has also been investing in this project since 2014 with the Oculus acquisition. Mark Zuckerberg telegraphed that the metaverse had been on his mind even before he started Meta. However, the company also recognizes that it will be fundamental to the success of its transformative project. It remains to be seen how FB will be able to do that. However, Meta believes that its metaverse project will help propel a leap over the limitations of these platforms. These platforms will get more entrenched with the proliferation of the mobile internet. Meta recognizes that it needs to build the next computing platform to compete effectively with iOS and Android. Even FB also embraces it through Oculus, and now extended through Project Cambria. Nevertheless, gaming is the fundamental starting point for the metaverse story to play out over time. Meta believes that it would extend those applications beyond the "gaming metaverse" to a whole host of consumers and corporate applications in the physical and virtual world. Gaming platforms such as Roblox and Epic Games are the pioneers in offering "metaverse-like" experiences through gaming. The Information believes that the current metaverse opportunity is still very much in its infancy. That would be just slightly less than the $86B FB earned in revenue in FY20. Zuckerberg emphasized Meta's goal is to " help the metaverse reach 1 billion people and hundreds of billions of dollars of digital commerce a day." While it's hard to put a number to the opportunity now, The Information prognosticate that the metaverse would be worth $82B by 2025. Meta recognizes the immense market opportunity in the metaverse. Meta is Transforming Itself by Building its Metaverse Opportunity Moreover, they are just slightly behind the Invesco QQQ ETF's ( QQQ) 22.4% YTD return. At the moment, both stocks still lead the SPDR S&P 500 ETF ( SPY). Consequently, FB stock's YTD gain plummeted from its high for the year. The weakness that affected social media stocks also impacted its stock price. It achieved more than 40% YTD gain before it lost its momentum at the recent retracement. Notably, its stock had maintained an excellent start to 2021, which got stronger as the year carried on. Incidentally, Meta stock's YTD gain (from 10 March) was also at 20.6% as of 29 October. However, it has made a remarkable recovery with a YTD gain of 20.6%. Its gains were almost completely wiped out at the recent September/October retracement. However, its momentum quickly fizzled out. Roblox stock had a blazing start from its March IPO as it raced to a YTD gain of almost 45% by June. We will discuss their YTD performances from 10 March onwards, as Roblox stock was listed on that day. RBLX stock YTD performance (as of 29 October 21). We discuss which of these metaverse stocks investors should buy to gain exposure to the massive metaverse opportunity that is still in the early innings of their development. So if you look at Roblox, then Roblox is arguably a Metaverse for younger gamers. Metaverse is more of an overarching opportunity in which different kinds of games are played within a single sort of social graph and software suite. Now I wouldn't say that Metaverse is a genre. Tencent ( OTCPK:TCEHY ) also acknowledged Roblox's metaverse ambitions, as chief strategy officer James Mitchell added: Roblox ( NYSE: RBLX) aims to create its metaverse for " human co-experience," powered by user-generated content (UGC). It's Meta's answer to the dominance of iOS, and Android ( GOOGL ) ( GOOG ) as the company charts its path towards an exciting future. Additionally, the metaverse is the company's long-term solution to design their operating system in lieu of the mobile internet. Moreover, the company has telegraphed that it will work around these issues over time. We think these advertising headwinds are transitory and not structural. The company also reported solid results in FQ3 despite the continued impact of Apple's ( AAPL ) IDFA changes. looks to the metaverse as the company's next transformative phase of growth. ( FB) was rebranded as Meta Platforms, Inc. Niphon/iStock via Getty Images Investment Thesis
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