3 Metaverse Stocks That Should Be on Every Investor’s Radar This Fall

Stocks to buy

The metaverse gives many companies the opportunity to profit and explore different revenue streams. Some companies contribute with artificial intelligence, computer security, or the creative side. The creative element has many components, such as designs, ideas, plans, and other things. It is undoubtedly a joint work, where every contribution counts for the growth of this sector. These three metaverse stocks are doing amazing and are worth a closer look.

Cloudflare (NET)

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Cloudflare (NYSE:NET) is like the digital guardian of the Internet. The firm stands guard over websites and applications, defending them from online threats. These cyber threats are constantly trying to disrupt your online experience.

The company’s recent financial results are proof of their success. In Q2 2023, they posted solid revenue of $308.5 million. This is an increase of 32% compared to the previous year. Although they recorded a loss from operations under standard accounting rules, it is crucial to note that they generated non-GAAP income from operations of $20.3 million. This figure underscores their strategic focus on growth.

Why is Cloudflare a promising metaverse value? First, it is a pioneer in Internet security. As the digital world expands, the importance of strong security measures grows exponentially. In addition, their steady revenue growth, as evidenced by their recent results, underscores their financial stability and potential for expansion.

They have recently introduced the “Cloudflare One Data Protection Suite.” This comprehensive security solution safeguards data in diverse environments, such as the Web, SaaS and private applications. It is a direct response to the evolving challenges of protecting sensitive data and intellectual property in today’s technology landscape.

Phishing is a major threat that Cloudflare is addressing. Its 2023 Phishing Threats Report highlights the persistent danger of phishing attacks on the Internet. Phishing is a rapidly growing form of cybercrime that affects organizations of all sizes. This report underscores the need for robust security solutions like the ones they offer to effectively combat this pervasive threat.

NVIDIA (NVDA)

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NVIDIA (NASDAQ:NVDA) has been at the forefront of the artificial intelligence revolution for more than a decade, demonstrating its unwavering dedication to AI technology.

Their journey in the field of AI began in 2006 with the introduction of the CUDA programming language. This language quickly gained popularity among AI developers and laid the foundation for a brilliant business strategy. Originally designed for gaming, NVIDIA’s graphics processors found a new home in data centers, meeting the advanced computing needs of operators.

NVIDIA’s financial results are impressive. In the second quarter of fiscal 2024, it posted record revenue of $13.51 billion. This is a staggering 88% increase compared to the previous quarter and a remarkable 101% increase compared to the same period last year.

In particular, its data center revenue reached a record $10.32 billion in the same quarter, a staggering 141% increase over the previous quarter and an extraordinary 171% growth compared to the same quarter last year.

Their commitment to AI leadership is underscored by the announcement of the Grace Hopper superchip. This next-generation processor combines a graphics chip with a processor and incorporates high-bandwidth memory 3 (HBM3e), capable of accessing information at a staggering five terabytes per second. The Superchip, known as GH200, will enter production in the second quarter of 2024.

Its dominance in the AI accelerator market has propelled its valuation above $1 trillion, making it the world’s most valuable chipmaker. The introduction of the GH200 processor is a bold statement by NVIDIA to maintain its leadership and stay ahead of competitors such as Advanced Micro Devices Inc. (NASDAQ:AMD) and Intel Corp. (NASDAQ:INTC)

Adobe (ADBE)

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Adobe (NASDAQ:ADBE) is a renowned software company that is making waves in the growing metaverse trend.

Adobe is synonymous with creativity and is worth considering for your portfolio, especially in the metaverse era. In their most recent quarter, the company announced adjusted earnings of $4.09 per share, beating analysts’ average forecast of $3.98 per share. This positive result indicates that they are beating expectations.

Revenue for the same period increased by 10.3% to $4.89 billion compared to the previous year. Analysts had expected slightly lower revenues of $4.87 billion.

It is worth mentioning that Adobe’s reported earnings per share for the quarter were $3.05, lower than adjusted earnings. While this variance may be due to a variety of accounting factors, it is a detail that investors should keep in mind.

Over the past three months, the average analyst estimate for Adobe’s earnings has increased by approximately 1.3%. This uptick indicates growing confidence in Adobe’s future earnings potential.

Adobe’s stock performance says it all, with a 13.2% increase in share price this quarter and an impressive 64.5% year-to-date gain. This suggests that investors are bullish on them, likely due to their strong financial results and growth prospects.

On Wall Street, the 12-month average price target for Adobe stands at $580.00. Investors should monitor Adobe due to its strong results and role in the metaverse.

As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.

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