Advancements in technologies like extended reality (XR), AI, machine learning, IoT, 5G, edge computing, blockchain, and digital twins are converging to create immersive industrial environments. These innovations are driving the shift from Industry 4.0 to the industrial Metaverse, enabling virtual factories and digitalized manufacturing ecosystems.
Amid this transformation, it could be wise to consider high-demand tech stocks such as NVIDIA Corporation (NVDA), Meta Platforms, Inc. (META), and Autodesk, Inc. (ADSK), which are powering the Metaverse’s growth.
The Metaverse and immersive technologies are reshaping tech infrastructure, hardware, software, and services, driving increased global demand for graphics, computing, networking, 3D design, engineering, and technology solutions. This growth is reflected in the Metaverse market, projected to expand at a 44.3% CAGR to reach $548.18 billion by 2028, underscoring its dynamic presence in the tech industry.
Moreover, the tech sector’s future shines bright with the Metaverse driving advancements in virtual events, e-commerce, education, gaming, social media, tourism, NFT marketplaces, and beyond. These transformative applications position the industry as a promising investment opportunity. Considering these conducive trends, let’s analyze the fundamental aspects of the three tech picks.
NVIDIA Corporation (NVDA)
NVDA provides graphics, computing, and networking solutions internationally. It operates in three segments: Graphics, Compute & Networking. The company’s products are used in gaming, professional visualization, data center, and automotive markets.
On November 19, 2024, NVDA and Microsoft announced new tools for developing AI-powered Windows apps on RTX AI PCs, enhancing speed and efficiency. They also introduced advanced AI models and optimizers for digital humans and local AI workflows, boosting app performance and accessibility.
On November 18, 2024, NVDA announced the Omniverse Blueprint, enabling real-time physics digital twins for industries like aerospace and automotive, integrating AI and advanced simulation tools. It accelerates workflows, offering up to 1,200x faster simulations and transforming industrial digitalization with leading software partners.
In terms of the trailing-12-month EBITDA margin, NVDA’s 63.53% is 522.8% higher than the 10.20% industry average. Likewise, its 75.98% trailing-12-month gross profit margin is 51.4% higher than the 50.18% industry average. Its 61.87% trailing-12-month EBIT margin is considerably higher than the 5.07% industry average.
NVDA’s revenue for the second quarter which ended on July 28, 2024, increased 122.4% year-over-year to $30.04 billion. The company’s non-GAAP operating income increased 156.4% year-over-year to $19.94 billion.
In addition, NVDA’s non-GAAP net income and non-GAAP net income per share came in at $16.95 billion and $0.68, representing increases of 151.5% and 151.9% from the year-ago values, respectively.
Street expects NVDA’s EPS and revenue for the quarter ended October 31, 2024, to increase 85.5% and 82.8% year-over-year to $0.75 and $33.12 billion, respectively. It surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 190% to close the last trading session at $142.96.
NVDA’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has a B grade for Sentiment and Quality. Within the Semiconductor & Wireless Chip industry, it is ranked #41 out of 90 stocks. To access additional grades for NVDA’s Growth, Value, Momentum, and Stability ratings, click here.
Meta Platforms, Inc. (META)
META engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs.
In terms of the trailing-12-month Return on Common Equity margin, META’s 36.13% is 827% higher than the 3.90% industry average. Similarly, its 25.02% trailing-12-month levered FCF margin is 182.4% higher than the 8.86% industry average. Additionally, its 35.55% trailing-12-month net income margin is 955.5% higher than the 3.37% industry average.
META’s revenue for the third quarter ended September 30, 2024, increased 18.9% year-over-year to $40.59 billion. Its income from operations grew 26.2% from the previous year’s quarter to $17.35 billion. For the same period, the company’s net income amounted to $15.69 billion, or $6.03 per share, up 35.4% and 37.4%, respectively, over the prior-year quarter.
Analysts expect META’s EPS and revenue for the quarter ending December 31, 2024, to increase 26.2% and 17.1% year-over-year to $6.73 and $46.98 billion, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 65.7% to close the last trading session at $554.58.
META’s positive outlook is reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.
It is ranked #15 out of 52 stocks in the B-rated Internet industry. It has an A grade for Sentiment and Quality. Click here to see META’s Growth, Value, Momentum, and Stability ratings.
Autodesk, Inc. (ADSK)
ADSK provides 3D design, engineering, and entertainment technology solutions worldwide. 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.
In terms of the trailing-12-month net income margin, ADSK’s 18.21% is 429.6% higher than the 3.44% industry average. Its 10.61% trailing-12-month Return on Total Assets is 491.7% higher than the 1.79% industry average. Also, its 23.36% trailing-12-month EBIT margin is 361% higher than the industry average of 5.07%.
During the fiscal second quarter that ended July 31, 2024, ADSK’s total net revenue amounted to $1.51 billion, up 11.9% year-over-year. Its non-GAAP income from operations rose 14.5% from the year-ago quarter to $560 million. Furthermore, the company’s net income and non-GAAP net income per share stood at $282 million and $2.15, up 27% and 12.6% from the prior-year quarter, respectively.
For the quarter ended October 31, 2024, ADSK’s revenue is expected to increase 10.5% year-over-year to $1.56 billion. Its EPS for the same quarter is expected to rise 2% year-over-year to $2.11. It surpassed the EPS estimates in each of the trailing four quarters. Over the past six months, the stock has gained 37.5% to close the last trading session at $304.18.
ADSK’s POWR Ratings reflect its solid prospects. It has an overall rating of B, equating to a Buy in our proprietary rating system.
It is ranked #22 out of 128 stocks in the Software – Application industry. It has a B grade for Growth, Sentiment, and Quality. To see ADSK’s Value, Momentum, and Stability ratings, click here.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
3 Stocks to DOUBLE This Year >
Want More Great Investing Ideas?
NVDA shares were trading at $145.52 per share on Tuesday afternoon, up $5.37 (+3.83%). Year-to-date, NVDA has gained 193.92%, versus a 25.39% rise in the benchmark S&P 500 index during the same period.
Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments. More…
