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Some undervalued metaverse stocks should be on investors’ radars this month. These companies are at the forefront of developing cutting-edge technologies that will shape the future of virtual worlds.
The metaverse is an emerging concept. It’s unwise to believe that since we aren’t plugged into AR/VR all day, it hasn’t yet made an impact. Our social lives are virtual; we have completely virtual economies and digital currencies. It makes sense that the metaverse continues to impact, as opposed to comparing it to an extreme benchmark.
These undervalued metaverse stocks may have high valuations, but their revenue and earnings growth metrics support how high they are expected to fly. Here are three undervalued metaverse stocks for investors to consider buying this year.
Meta Platforms (META)
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Despite a 15% drop in share value for Meta Platforms due to weaker second-quarter revenue guidance and increased AI spending, Meta remains a top performer among U.S. big tech companies. Its net income doubled, primarily driven by advertising revenue, while its Metaverse division continues to invest heavily despite running at a loss.
Still, its recent share price nosedive discounts its prospects heavily. The reason is that META is still growing very quickly. Analysts predict that its top-line will continue to grow in the double digits over the next four years, and there are sizable EPS increases on the way, according to their forecasts. This is impressive, given that it hovers around the $160 billion mark at the time of writing.
Like most of the tech stocks in FAANG, META was also arguably trading at a premium to its intrinsic valuation, to begin with, given the historic tech rally we’ve seen over the past couple of years. This correction could then be seen as healthy for its valuation in the long run and create some enticing entry opportunities for investors.
Coinbase Global (COIN)
Coinbase Global (NASDAQ:COIN) is one of the largest cryptocurrency exchanges globally. Despite the uncertainty in the crypto market of whether we’re in a bull or bear market for Bitcoin (BTC-USD), volatility is normal and expected. Coin will have a blowout year in 2024 due to the amount of liquidity being passed through the platform.
Coinbase Global’s Q1 earnings soared to $1.6 billion last quarter, marking a 72% increase driven by the surge in crypto prices and the introduction of spot Bitcoin ETFs in the U.S. The company reported a net income of $1.18 billion and $1 billion in adjusted EBITDA, partly attributed to $737 million in pre-tax unrealized gains on crypto assets. Consumer transaction revenue doubled, reaching $935.2 million, with institutional interest also rising significantly.
The best has yet to come, as it only stands to benefit from the wild west of Bitcoin’s rise and fall throughout the year. A choppy market is arguably better for exchanges. Traders and investors oscillate between greed and fear, thus spending more on transaction fees and other platform services overall.
Advanced Micro Devices (AMD)
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Advanced Micro Devices (NASDAQ:AMD) is a leading semiconductor company.
The company’s share experienced a significant drop following its Q1 earnings report despite beating Wall Street’s earnings target. While the company’s revenue and earnings slightly exceeded analyst expectations, they fell short of higher-end estimates. AMD’s Q1 revenue grew 2.2% year over year. Strong performance in its data center segment drove this but declines in other segments offset growth.
Semiconductors are highly cyclical and sensitive to changes in the macro backdrop. This is a short-term weakness for AMD. Its drop in share price, down 5.44% over the past five days, is ultimately a good thing for investors. If it were structural, we’d expect to see more of a sell-off. But it’s more a case of bulls taking profits and then riding it back to the top again as the broader indices show signs of recovery this month.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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