Wall Street is getting very excited about the metaverse, with investment bank Jefferies perhaps the most optimistic.
Its head of thematic research Simon Powell told CNBC that the metaverse is an investment opportunity akin to the early days of the internet.
“The way to think about it is [that] all human activity that hasn’t moved online is about to move online in the next five to 10 years,” he said. “We can only imagine what it can be.”
Powell was speaking to CNBC’s “Worldwide Exchange” on Friday, after Jefferies released a research note saying the metaverse will be the biggest disruption to how people live ever seen.
The metaverse is a fuzzy term that refers to a wide range of virtual worlds, in which people use avatars to play games, watch virtual concerts, work, build things, and even buy and sell crypto assets such as non-fungible tokens, or NFTs.
Social media giant Facebook recently changed its name to Meta to mark a switch in focus to the metaverse. The move spurred a surge of interest in the idea among investors and other technology companies.
Powell said investors should be thinking about investing in the metaverse as though they were investing in the early internet. That means first focusing on hardware providers; then on software providers; then on companies that actually operate inside the technology.
“What did you want to own from 1989 to 2000? You wanted to own the Ciscos of the world. And I think the same is going to be true for the metaverse,” he said.