As the world navigates through the ongoing economic uncertainties and decline in 2022, some innovative industries have been bucking the trend. For example, the emergence of metaverse companies, where virtual worlds meet real-life experiences, has been a bright spot for investors.
Metaverse stocks have shown resilience and growth potential even in the worst economic downturns. For example, while many companies in the tech-heavy Nasdaq lost over 33% in 2022, two notable metaverse stocks stood out, with Meta Platforms gaining over 10% and Snap gaining over 0.18%.
With the metaverse revolution gaining momentum, investors and traders are turning to these stocks for opportunities to ride the wave of the future. In this piece, we will look at the top metaverse stocks and their performance and explore the factors driving the growth of the metaverse industry.
Meta Platforms, formerly known as Facebook, has been on a mission to reduce costs in the wake of the economic downturn of 2022. The company’s first step towards this goal was a massive job cut in January 2022, which resulted in the layoff of over 10,000 employees, or roughly 12% of its workforce.
According to analyst Brad Gerstner, the company needs to cut costs to offset the slowdown in using its prime social platforms, Facebook and Meta. Despite the challenges, Meta Platforms has remained afloat, gaining over 38% in the stock market in 2023.
However, the company is being dragged down by losses from its Reality Labs division, which lost $13 billion last year and over $4 billion in Q4. To counter this, the company’s CEO has committed to running it more efficiently as they move through 2023, showing more room for growth.
Turning our attention to SNAP, the parent company of the once-popular Snapchat app, we find a different strategy from its competitor, Meta. While Meta concentrates on developing fully immersive experiences in the metaverse, SNAP focuses on using augmented reality (AR) to extend the real world.
The company’s wearable, Spectacles, are glasses that provide users with digital enhancements as they go about their daily activities. SNAP started the year on a strong note, with revenue increasing by 12% from 2021 to over $4.5 billion.
SNAp’s strong financial performance can be attributed to its ongoing innovation in the AR space, which has helped maintain and grow its user base. In addition, the company’s advertising revenue has also increased, thanks to its focus on developing advertising tools and features that cater to its younger audience.
Investors are looking ahead to 2023; SNAP’s future appears bright as it continues to build on its AR technology. The company is also exploring new avenues of growth, such as e-commerce and gaming, which could help it to diversify its revenue streams.
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