The newly formed metaverse, according to Meta Platforms Inc (NASDAQ: META) CEO Mark Zuckerberg, could be home to billions of users.
What Happened: Zuckerberg met with CNBC's Jim Cramer to discuss this.
“By the end of the decade, we hope to basically get to around a billion people in the metaverse doing hundreds of dollars of commerce each," said Zuckerberg. "Buying digital goods, digital content, different things to express themselves — I feel there is going to be a massive economy around this."
The company, which was previously known as Facebook (NASDAQ:META), is more directed by Zuckerberg toward what he sees as the next generation of content: a virtual marketplace where users can exchange digital items for talkative avatars.
It is worth mentioning that after two straight quarters, the company's growth was revealed as stalling and investors drove the price of Meta stock down by about 50% in the first half of this year.
“Our playbook over time has been [to] build services, try to serve as many people as possible, get our services to three billion people — then we scale the monetization after that. We’ve done that with Facebook and Instagram,” Zuckerberg said.
He indicated Reality Labs, Meta's metaverse department, is now losing money and the company is aware of this. After losing $10 billion the previous year, it lost slightly under $3 billion in the first quarter. Before starting to monetize, Zuckerberg wants to attract people to the site. So, a loss in the first few years is expected.
Perfecting the metaverse, Zuckerberg added, will be a major subject for Meta during the next 10 years since experiences in the metaverse can be more immersive than text, photographs or videos, which are prevalent on Meta's Facebook and Instagram.
Following the interview, Cramer met with CNBC’s “Squawk on the Street” team to discuss the five reasons why he thinks Meta stock is a buy.
1. "You’re talking about a billion people, you’re talking about hundreds of dollars per person, you’re talking about market share take by Zuckerberg, and you’re talking about an incredibly cool place to go."
2. "It’s better than Zoom Video Communications Inc (NASDAQ: ZOOM). When you’re in a meeting, you can whisper to a person. The enterprise is much better."
3. "People should be buying the stock because [Zuckerberg said] Reels — Meta’s competitor to TikTok — is doing much better than expected, and they’re making money off the [Oculus] headset."
4. "I am telling you, this thing is radical."
5. "They’re giving the creators and developers free reign until 2024 to write and develop the metaverse. They will take no cut, and that will make it so their mode is very high. They won’t be spending as much as we thought; it won’t be in the tens of billions because they’re so far ahead of everyone."
Photo: Screenshot of CNBC Squawk on the Street via YouTube
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