Tech giants are investing heftily to develop metaverse platforms, given its wide-ranging applications. The metaverse concept encompasses virtual reality (VR) and augmented reality (AG) technologies. Financial services company Jefferies Group has predicted metaverse will be the…
biggest disruption in the coming years, akin to the internet in its early days.
Companies and investors are warming to the idea of the metaverse, and investment bank Morgan Stanley (MS) even predicts it will be the next big investment theme.’ The global metaverse market is expected to reach $872.35 billion in 2028 and register a 44.1% CAGR.
Therefore, the fundamentally sound stocks of Microsoft Corporation (MSFT – Get Rating) and Meta Platforms, Inc. (FB – Get Rating) might be ideal bets. FB has made substantial investments in VR, while MSFT already uses extended reality (XR) applications in its Microsoft Mesh platform.
Microsoft Corporation (MSFT – Get Rating)
MSFT is a software behemoth that provides software services, solutions, and devices worldwide. The company sells its products through distributors, OEMs, resellers, or digital marketplaces. It has a more than $2 trillion market capitalization.
On December 2, MSFT and CVS Health Corporation (CVS) announced a strategic alliance to develop innovative solutions for consumers’ health. Given the accelerated transformation initiatives in the healthcare sector, this alliance could prove profitable for MSFT.
On December 1, MSFT released Teams Essentials, a stand-alone affordable Microsoft Teams offering designed for small businesses. The solution should be in demand given the popularity of remote working and hybrid work structures.
For its fiscal first quarter, ended September 30, MSFT’s total revenue increased 22% year-over-year to $45.32 billion. Its operating income increased 27.5% from the prior-year quarter to $20.24 billion. Its net income and EPS stood at $20.51 billion and $2.71, respectively, registering a47.6% and 48.9% increase year-over-year.
Analysts expect MSFT’s EPS to improve 14.3% year-over-year to $9.20 in the current year (fiscal 2022), while the Street’s $196.73 billion revenue estimate for the current year indicates a 17% rise from the prior year. In addition, the stock has beaten consensus EPS estimates in each of the trailing four quarters.
MSFT’s stock has gained 48.2% in price over the past year to close yesterday’s trading session at $324.90. It has gained 46.1% year-to-date.
MSFT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
MSFT has a Sentiment grade of A and a Stability and Quality grade of B. In the 168-stock Software – Application industry, it is ranked #14. Click here to see the additional POWR Ratings for MSFT (Growth, Value, and Momentum).
Meta Platforms, Inc. (FB – Get Rating)
FB, which is headquartered in Menlo Park, Calif., is the biggest social media company in the world. As the owner of WhatsApp, Instagram, and various other companies, FB has operations in numerous fields. On October 28, FB CEO Mark Zuckerberg introduced Meta, bringing Facebook’s app and technologies under a new brand, with the expectation of…
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