Satya and Mark Zuckerberg are both convinced that the metaverse is the future. Zuckerberg is so certain of the future potential of this new phase of the internet, that Facebook (the company he started and runs) is called Meta Platforms. 

Nadella, the chief executive of Microsoft, is making clear the extent of his ambitions through this week’s $69billion (£50billion) purchase of video games giant Activision Blizzard, which makes Call of Duty. 

This deal will alert private investors about the increasing hubbub over the metaverse. 

The metaverse, for the inexperienced, is an immersive digital 3D ecosystem that you can enter by wearing either a VR headset (virtual reality), or AR (augmented reality). 

Users will be able not only to play games, but can also shop, go to galleries, and even consult a doctor. 

Bloomberg Intelligence predicts that companies in the metaverse economy will earn revenues of $800 billion by 2024. This is according to Jefferies analyst. 

Some of the most hyped digital innovations have failed to materialize. 

Second Life was a virtual reality platform that allowed you to live in another world. The idea sounded futuristic at the time. 

However, Jonathan Tseng of investment management firm Fidelity International contends that the shift to the metaverse is an inevitable progression, similar to the transition from surfing the net on a desktop computer a decade ago to using our mobile phones. 

He says, “The metaverse does not represent the next internet but rather the future of our current one.”

“It will provide a digital layer which can enrich the world around it. 

“The possibilities are limitless.” Customers will soon be able use headsets for teleporting to the Olympics and changing the view from their windows to see a Caribbean beach. 

James Yardley of Chelsea Financial Services argues that improvements in graphics and VR technology will enhance every metaverse activity: ‘We are already almost at a photo real experience – which means that you can’t distinguish with your eyes between the real world and the VR world.’ 

He says that companies will save money by using the metaverse to build and test virtual versions of products. It also reduces the need for real-world manufacturing. Nvidia is the US-based giant that wants to acquire Arm the UK’s chip design company. He says the Omniverse allows the development of digital twins. You may be dubious about this digital enterprise. It is possible that we will live more online lives, even if the pandemic has passed. 

Commerce has already crossed over into the metaverse – and that will be the route to attracting younger consumers in the view of fashion giant Ralph Lauren, US discounter Walmart and other retailers. 

Sotheby’s operates an online auction house called Decentraland that allows you to trade digital artworks. With millions of people, a metaverse alliance was formed between Samsung and 400 Korean companies.

Roblox is a Nasdaq stock that allows video game creators to create and sell their games online. 

It’s worthwhile to look at companies such as Meta and Microsoft, which are making a move into the metaverse but will still thrive even if it fades. 

Apple will not be involved at the moment. However, its next release is a VR headset. 

Charles Stanley Direct, Rob Morgan, emphasizes the fact that not all companies are successful early. “Google and Meta did not exist during the first years of internet growth. 

It is important that you use the principle of ‘picks & shovels’ and remember that the Gold Rush was a gold rush that saw the success of the kit suppliers, not the prospectors. 

Zuckerberg’s wager is supported by Meta’s ownership in Oculus Rift, a VR headset company.

Intel, the maker of silicon chips, predicts that metaverse applications will soon require at most 1000-times the computing power currently available.

As microchip demand is expected to rise, it’s important that you watch for any weakness in Nvidia or TSMC prices as potential buying opportunities. 

Fundsmith where I’m a holder has stakes on Meta and Microsoft. Baillie Gifford Pacific, meanwhile, holds Samsung. 

Dzmitry Lipski, Interactive Investor, recommends the Polar Capital Technology trust for exposure to Meta Software, Roblox, and Unity Software. This is an 8 percent discount on the net assets. 

It is a reflection of the increased threat tech stocks face from rising interest rates and the determination of US legislators to limit Big Tech’s power, which seems to be increasing. 

This environment is expected to see an increase in the number of people gambling online and in gaming. Meta, which patents technologies using the eye movements of VR-wearers to deliver personalised advertisements at them as an example of their technology, was revealed this week. But I’m cautious about going in this direction.

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