These days, it seems like every company has some grand ideas for the "metaverse," which will merge the physical and digital worlds. Some companies are starting small by selling non-fungible tokens (NFTs) for virtual goods, while others are planning to build entire virtual worlds.

All that noise can make it hard to distinguish the hype from the reality. So today, I'll take a look at four companies that could actually benefit from this secular trend and permanently transform how we interact with each other.

1. Meta Platforms

Meta Platforms (NASDAQ: FB), the company formerly known as Facebook, adopted its new name to reflect its long-term focus on the metaverse. It already has many of the building blocks to construct that virtual world.

A whopping 3.58 billion people already use at least one of its apps (Facebook, Messenger, Instagram, or WhatsApp) every month. It's reportedly sold over 10 million Quest 2 VR headsets over the past year, and it just launched Horizon Worlds -- a VR world that will enable those headset users to interact with each other. It recently released its first pair of smart glasses, and it plans to launch more advanced AR headsets in the future.

As Meta puts all those pieces together, it will expand its reach far beyond PCs and mobile devices. People will eventually be visiting each other's profiles in VR or using its AR tools to scan real-life objects. In other words, it could transform the entire world into one big computing platform.

2. Roblox

Roblox's (NYSE: RBLX) ambitions aren't as grand as Meta's, but they're easier to understand. Roblox's platform enables its users to create simple block-based environments and games for each other without any coding knowledge. It's tremendously popular with children, and its creators can monetize their games with an in-game currency called Robux.

Roblox is a self-sufficient ecosystem because it relies on its audience of nearly 50 million daily active users to create and explore new virtual worlds. The expansion of that ecosystem will convince more companies to build their own worlds within Roblox's universe to reach more consumers.

That's why Nike (NYSE: NKE) just launched a virtual theme park called Nikeland on Roblox, which lets players compete in virtual sporting events. If more brands follow Nike's lead, these metaverse-based promotions could become much more important than traditional marketing campaigns.

3. Nintendo

The Japanese gaming giant Nintendo (OTC: NTDOY) also owns many of the ingredients to create a massive metaverse ecosystem. It's shipped 98.1 million Switches since March 2017, and those hybrid devices can be easily converted between home console and handheld modes.

Carrying a Switch around is less cumbersome than wearing a VR headset, and the devices can also be converted into VR headsets with a Labo kit. That versatility makes the Switch an ideal platform to launch immersive multiplayer games like Animal Crossing: New Horizons.

Nintendo has already shipped nearly 35 million copies of Animal Crossing: New Horizons worldwide, and the hit game is already a mini-metaverse that allows players to own homes, perform jobs to earn an in-game currency, and socialize with other players. That foundation could lead to the development of other Switch-based metaverse experiences in the future.

4. Match Group

Match Group (NASDAQ: MTCH), the online dating giant that owns Tinder and more than a dozen popular dating apps, serves over 16 million paying users worldwide. On their own, Match's dating apps can already be considered metaverse products that help people meet each other digitally.

However, Match has much bigger plans for the metaverse. It's currently testing out a new feature called Single Town across college campuses in Seoul, South Korea. The app enables its users to communicate with each other through digital avatars in virtual environments like a bar or a park. It's a bit like a dating-oriented version of Animal Crossing.

During last quarter's conference call, CEO Shar Dubey said Match was seeing "encouraging early signals" in terms of engagement rates among Gen Z users on Single Town -- which strongly suggests we might see similar game-like features for its other dating apps in the near future.

It's not just a hot new buzzword

It's tempting to dismiss the metaverse as another hot tech buzzword that tethers existing technologies like multiplayer games, persistent online worlds, and virtual goods to the AR and VR markets.

However, the metaverse can fundamentally change how we interact with each other -- as Meta, Roblox, Nintendo, and Match are now demonstrating. These efforts might not boost their near-term revenue, but they could help them eventually evolve into very different companies over the long term. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 4 monster Metaverse stocks for the long haul appeared first on The Motley Fool Australia.

Yesterday I penned an article noting 3 reasons the S&P/ASX 200 Index (ASX: XJO) is likely to join US indexes to hit its own new record highs.

Although the ASX 200 slipped yesterday, and is down 0.5% in late morning trading today, that positive outlook certainly remains true.

However, while there are plenty of great performing shares on the ASX you should have in your portfolio, today I want to stress the importance of looking beyond the local markets. Specifically, to US markets.

Why you shouldn't limit yourself to ASX shares

Let's look at the relative performance of the Aussie and US markets first.

Over the past 12 months the ASX 200 is down 3.4%. Over 5 years it's up 27.2%.

Over the past 12 months the S&P 500 Index (INDEXSP: .INX) is up 15.1%. Over 5 years it's up 73.7%.

The tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) has performed even better. Over the past 12 months the Nasdaq is up 38.9%. Over 5 years it's up 135.9%.

Have another look at those returns. A picture may paint a thousand words, but these figures speak for themselves.

Tremendous benefits

Scott Phillips, the Motley Fool's chief investment officer in Australia, has had great success investing in ASX shares. But he's also a strong proponent of investing internationally, particularly in US share markets.

Here's an excerpt from an article he wrote for his investment service, Share Advisor, in April 2019:

Investing internationally delivers tremendous portfolio diversification benefits and brings a world of opportunities to your investment doorstep…

The fact of the matter is — some of the very best companies on planet Earth aren't listed on the ASX. The Australian share market is a minnow on the global stage. Our share market represents a tiny 2% of global stock markets. If you exclude our two big miners and four large banks, that falls to almost 1%…

By investing part of your funds internationally you not only increase the opportunity to find the big winners of tomorrow, but you also reduce the risks that are specific to Australia. Risks that could seriously damage your portfolio.

Most online brokers these days offer you relatively inexpensive (and sometimes free) access to trading US shares.

You should be aware of the additional risks, though, chiefly currency fluctuations. If you invest in US shares and the Aussie dollar appreciates against the greenback, this will negatively impact your returns. Of course, if the Aussie dollar falls in value against the US dollar, it will boost those returns.

Why Bank of America and Blackrock are bullish on US shares

As the Australian Financial Review reports, Bank of America Corp (NYSE: BAC) is bullish for the outlook of US shares.

Noting that risks remain around the delivery of COVID vaccines and the potential for lengthier global lockdowns, the bank forecasts that a 5% increase in the S&P 500 from its Wednesday close is a conservative estimate:

[A] few themes support stocks: the S&P 500 dividend yield is three times the 10-year yield, and S&P 500 dividends are set to increase in 2021. And unlike bond yields, earnings are nominal and participate in inflationary upside – where inflation risks may be running higher, given rampant money-printing and a potential post-vaccine spike in demand…

Technology and Health Care offer neglect and growth at a reasonable price. We are underweight Staples, Real Estate and Comm. Services which represent past leadership, in our view, of bond-proxies and secular growth. We prefer small to large amid expectations for a strong US economic recovery.

BlackRock Investment Institute is also optimistic on the outlook for US shares, saying investors should look beyond the current volatility.

According to Mike Pyle, global chief investment strategist at BlackRock (quoted by Bloomberg):

We upgrade U.S. equities to overweight, expecting this market to benefit from both structural growth trends and a potential cyclical upswing during 2021. Positive vaccine news reinforces our outlook for an accelerated restart during 2021, reducing risks of permanent economic scarring.

BlackRock stated that apart from the mega-cap tech stocks, there are also semiconductor and software companies with strong growth trends that face few regulatory risks.

2 outperforming US shares with a 'buy' rating

We leave off today with a look at 2 outperforming shares Scott Phillips has previously recommended to the members of Share Advisor. Though they've posted strong gains since his recommendations, Scott maintains a 'buy' rating on both.

First up is Trade Desk Inc (NASDAQ: TTD). The company helps advertisers place programmatic ads across the web, on mobile, and in other places.

Scott recommended Trade Desk on 19 July 2019. His reasons to buy included the company's innovative business model's success at winning and keeping customers, its treasure trove of data to help clients, and its fast growing and scalable business.

Since Scott recommended it, the Trade Desk share price has rocketed 266.4% higher.

Today's second outperforming US share is Match Group Inc (NASDAQ: MTCH). The company owns more than 40 separate online dating platforms including Tinder.

Scott recommended Match Group on 18 June 2020. His reasons to buy included the company's impressive history of growth, the fact that Tinder continues to lead the way among dating apps, and that Match Group had plenty of room to grow profitability.

The Match Group share price is up 60.6% since 18 June.

At risk of being repetitive, when it comes to looking beyond ASX shares, these figures speak for themselves.

The post Why investors should look beyond ASX shares for outsized gains appeared first on The Motley Fool Australia.