With the world adopting digital interaction, the metaverse, a convergence of augmented and virtual reality, is shaping the future of interaction, commerce, and entertainment. Therefore, it might be considered wise for investors to invest in fundamentally sound Metaverse stocks: Microsoft Corporation (MSFT), Meta Platforms, Inc. (META), and Autodesk, Inc. (ADSK), which are well-positioned to offer growth.
Tech giants are heavily investing in building platforms to power the metaverse. Big corporations believe software, game, and app developers will not just build programs but also architect the digital reality. These companies are advancing tools like VR headsets, immersive gaming environments, and collaborative virtual spaces.
The metaverse extends beyond gaming and entertainment. Industries like education, healthcare, and retail are adopting virtual environments to enhance learning, training, and shopping experiences. This diversification is making metaverse stocks appealing to a broad range of investors.
Precedence research suggests that the global metaverse market is anticipated to reach $2.37 trillion by 2033, growing at a CAGR of 38.3%. The metaverse's economic ecosystem is vast, encompassing digital real estate, NFTs, virtual currencies, and more. As the concept of the metaverse matures, companies building the infrastructure and experiences for these virtual worlds will likely see growing demand.
With that in mind, let’s examine the fundamentals of the above-mentioned stocks in detail:
Microsoft Corporation (MSFT)
MSFT is a technology company that develops and supports software, services, devices, and solutions worldwide. The company operates through three segments: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing.
On October 3, MSFT announced a strategic partnership with Rezolve AI, a global leader in AI-powered commerce solutions, to empower retailers with advanced capabilities for digital engagement. Under this partnership, Microsoft Cloud-powered AI aims to transform customer engagement and operations, reinforcing MSFT’s position in the AI industry.
MSFT's trailing-12-month net income margin and ROCE of 35.61% and 19.88% are 809.4% and 535.5% higher than their respective industry averages of 3.92% and 3.13%. Likewise, its trailing-12-month levered FCF margin of 24.11% is 117.4% above the industry average of 11.09%.
For the first quarter of 2025, which ended on September 30, MSFT’s total revenue increased 16% year-over-year to $65.59 billion. The company reported operating income of $30.55 billion, indicating a 13.6% growth from the prior-year quarter. In addition, its net income amounted to $24.67 billion and $3.30 per share, reflecting increases of 10.7% and 10.4% year-over-year, respectively.
The consensus revenue estimate of $68.91 billion for the fiscal second quarter (ending December 2024) represents an 11.1% increase year-over-year. The consensus EPS estimate of $3.16 for the same quarter indicates a 7.8% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
The stock has gained 18.5% over the past year and 9.3% over the past three months to close the last trading session at $443.33.
MSFT’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
MSFT has a B grade for Stability, Sentiment, and Quality. It is ranked #15 out of 39 stocks in the B-rated Software - Business industry. Click here to see the additional ratings for MSFT (Growth, Value, and Momentum).
Meta Platforms, Inc. (META)
META engages in the development of products globally that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables. It operates in two segments: Family of Apps and Reality Labs.
In terms of the trailing-12-month net income margin, META’s 35.55% is 860.7% higher than the 3.70% industry average. Similarly, its 21.66% trailing-12-month ROTA is 1143.8% higher than the industry average of 1.74%. Also, its trailing-12-month ROCE of 36.13% compares to the industry average of 4.35%.
During the third quarter that ended on September 30, META’s revenue increased 18.9% year-over-year, amounting to $40.59 billion. It posted income from operations of $17.35 billion, indicating a 26.2% increase from the prior-year quarter.
In addition, META’s net income stood at $15.68 billion, up 35.4% year-over-year, while its earnings per share grew 37.4% from the year-ago value to $6.03. Its adjusted free cash flow rose 13.8% from the year-ago value to $15.52 billion.
Street expects META’s revenue for the fiscal fourth quarter (ending December 2024) to increase 17.1% year-over-year to $46.98 billion. Its EPS for the same period is expected to register a 26.5% growth from the prior year, settling at $6.74. In addition, it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.
META shares have surged 86.1% over the past year and 25.6% over the past six months to close the last trading session at $619.32.
META’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It also has an A grade for Quality and a B for Sentiment. Within the A-rated Internet industry, it is ranked #18 out of 52 stocks. Click here to see META’s ratings for Growth, Value, Momentum, and Stability.
Autodesk, Inc. (ADSK)
ADSK is engaged in 3D design, engineering, and entertainment technology solutions. The company offers AutoCAD Civil 3D, BuildingConnected, AutoCAD, AutoCAD LT, CAM software, Fusion 360, and Industry Collections for professionals in various industries, including civil engineering, preconstruction, design, manufacturing, and media.
The stock’s trailing-12-month EBIT margin of 22.95% is 330% higher than the industry average of 5.34%. Similarly, its 53.25% trailing-12-month ROCE is 1128.7% above the industry average of 4.33%. Also, its trailing-12-month ROTC of 18.34% compares favorably to the industry average of 3.13%.
ADSK’s total net revenue for the third quarter (ended October 31, 2024) increased 11% year-over-year to $1.57 billion. Its non-GAAP income from operations is $573 million, indicating a 4.8% growth from the prior year's quarter. ADSK’s net income came in at $275 million and $2.71 per share, up 14.1% and 13.4% year-over-year, respectively. Also, its free cash flow grew significantly from the same period last year to $199 million.
Analysts expect ADSK’s revenue for the fourth quarter (ending January 2025) to increase 11.1% year-over-year to $1.63 billion, while its EPS for the same period is expected to grow 2.2% from the prior year to $2.14. Moreover, it topped Street revenue and EPS estimates in each of the trailing four quarters, which is excellent.
Over the past six months, the stock has surged 39.3%, closing the last trading session at $303.99.
ADSK’s promising fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system.
It has an A grade for Quality and a B for Sentiment. The stock is ranked #23 out of 126 stocks in the Software - Application industry. Click here to access the additional ADSK ratings (Growth, Value, Momentum, and Stability).
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MSFT shares were trading at $448.80 per share on Wednesday afternoon, up $5.47 (+1.23%). Year-to-date, MSFT has gained 20.24%, versus a 29.11% rise in the benchmark S&P 500 index during the same period.
About the Author: ShreyaRathi
