13 Content Creation Picks Ready to Soar
- Credit Suisse predicts that the metaverse will “bring profound changes” to many industries.
- Internet, gaming, software and media businesses in content creation are poised to benefit.
- The bank’s head of global industry research has shared his top 13 names to buy.
The recent binge eating that has been seen companies and investors the same herd to the Metaverse might bring to mind the California Gold Rush, when hordes of eager suitors tried their hand at making their fortunes but only a lucky few triumphed.
Still, with billions of dollars at stake, today’s feverish foray into the metaverse might have slightly higher stakes. just a week ago, Metathe stock dipped more than 25% when the company formerly known as Facebook announced that, among other mishaps, its metaverse business had lost $10 billion in the fourth quarter of 2021. Simultaneously, major tokens like bitcoin and ether were in the midst of a crypto crash.
As these problems piled up, new questions arose, perhaps the most important being: can investing in the metaverse really bring big payoffs?
Experts like Evercore’s Mark Mahaney and analysts at Grayscale, the world’s largest crypto fund manager, certainly seem to think so. Both predict that the metaverse will represent trillions of dollars in value creation over the next few years.
A team of Credit Suisse research analysts, led by head of global sector research Manish Nigam, also expressed optimism in a note on Tuesday.
“The Metaverse is expected to eventually bring profound changes to the entire technology, media and telecommunications industry,” Nigam wrote, adding that “perhaps none as early or as extensive as in consumer electronics.” .
“We also believe that the metaverse will drive required capability upgrades to nearly every hardware device involved, and may even lead to some dedicated ‘killer’ hardware products such as the iPhone was for the 3G era (data mobiles),” he wrote.
Basically, Nigam and his team have divided the sectors that will be most affected by the development of the metaverse into three broad categories. The first focuses on content creation companies, covering internet platforms, game companies, software companies specializing in 3D modeling and media players.
“New applications are being developed to evolve today’s experiences in gaming, entertainment, commerce, online property monetization, advertising, and consumer and enterprise social connectivity,” said writes Nigam.
Companies will race to dominate the game
In gaming, Nigam believes the emerging metaverse experience can be seen as an “extension of the current cloud gaming case.”
In the note, Nigam referred to Google’s Stadia cloud gaming platform, which has long-term potential but has run into a lot of problems in the short term. Similarly, Nigam wrote, VR gaming has enormous potential but has yet to become mainstream.
“It may take some time before we reach an environment of mass consumer adoption of VR-based entertainment,” he said.
But according to Nigam, it’s only a matter of time before a new gaming landscape becomes the norm. He envisioned the cloud gaming competitive landscape as a race between seven big tech giants – Meta, Nvidia, Google, Amazon, Microsoft, Sony and Apple.
Media companies will shine
Nigam also expects media companies to “play a pivotal role in the metaverse landscape, given their vast treasure troves of beloved brands, franchises, characters and stories to create immersive experiences for their own offers and those of others”.
Nowadays, musical concerts are frequent on virtual platforms, such as DJ set Roblox by David Guetta Where Ariana Grande’s appearance in Fortnite. But Nigam expects more content to be available in the metaverse, such as Hollywood movies, TV shows, and sporting events.
Along the way, he predicts media companies will embrace new technologies, like virtual reality, to create stronger engagement with consumers. This migration to new innovations, he said, is comparable to the historic shift from black-and-white television to color.
The software stands out
Of course, as the metaverse grows in influence, so will the software companies behind the scenes, Nigam said.
In particular, platforms like Microsoft and 3D modeling companies like Adobe and Autodesk are “well positioned in mixed reality environments and offer the most compelling potential for growing the metaverse,” he wrote. While Microsoft clearly dominates in all areas of augmented reality, virtual environments, and games, Adobe facilitates the design and illustration behind the graphics, and Autodesk powers the architecture, engineering, and construction globally.
Overall, Nigam wrote, “Companies best positioned for the metaverse era have scaled data center footprints, deep services and content, gaming platform businesses/ existing video, embedded hardware and/or 3D game engines”.
To that end, Nigam and his team have identified 13 content creators to buy at the dawn of the Metaverse era, potentially fueling “transformational implications” for the world as we know it. The stocks cover four sub-sectors – internet platforms, games, software and content – and are listed below, along with each company’s ticker, market cap, price target and metaverse theme.