If there were an award for the most misunderstood investment theme of the past five years, the metaverse would probably win.
Back in 2021, it seemed impossible to avoid. Facebook even changed its name to Meta Platforms (META), companies rushed to announce virtual reality strategies, and investors poured billions into anything connected to digital worlds.
Then the excitement vanished.
Virtual real estate collapsed. NFT speculation imploded. Meta’s Reality Labs division became the target of endless criticism as losses mounted into the tens of billions of dollars. Before long, “metaverse” became a punchline.
One such stock, Vuzi (VUZI) – a maker of smart glasses and AR hardware – rallied as much as 35X from the low in 2020 to the high in 2021. The stock is now back near where it began.
Most investors assumed the entire idea had failed – for good reason.
However, I believe they were looking at the wrong part of the story.
The original investment narrative centered on people spending their evenings wearing headsets and socializing inside virtual worlds. While that vision may eventually become reality, it was never the most important opportunity.
For me, there is nothing better than socializing. But, I much prefer over a nice glass of wine overlooking the sunset or during a riveting conversation – in person.
Others agreed with me, but keep in mind at the time we were coming out of the government-enforced COVID lockdown.
What you need to realize now is that the real opportunity is much bigger.
Today, the same technologies that were grouped under the metaverse umbrella are becoming essential tools for artificial intelligence, robotics, manufacturing, engineering, healthcare, and product design.
Before autonomous vehicles drive on public roads, they spend millions of virtual miles learning inside digital environments.
Before humanoid robots work in factories or warehouses, they practice countless movements inside highly realistic simulations where mistakes don’t cost money - or injure people.
Manufacturers are increasingly building digital twins of entire factories, allowing engineers to test new production lines, optimize workflows, and identify problems before making expensive changes in the real world.
Architects are designing buildings inside immersive 3D environments. Surgeons are rehearsing complex procedures using virtual models. Aerospace companies are simulating aircraft components before ever building a physical prototype.
None of that requires consumers to spend hours wearing a virtual reality headset.
Yet all of it relies on many of the same technologies that investors once dismissed as “the metaverse.”
Artificial intelligence is making these virtual environments even more valuable.
AI-generated worlds can now be created in minutes instead of weeks. Robots can learn inside increasingly realistic simulations before entering the physical world. Engineers can test thousands of design variations automatically rather than building costly prototypes.
In many cases, simulation has become the training ground for artificial intelligence itself.
That creates opportunities far beyond gaming.
Companies like NVIDIA (NVDA) have built powerful simulation platforms such as Omniverse, allowing manufacturers and robotics companies to create highly realistic digital environments.
Autodesk (ADSK), PTC (PTC), Dassault Systèmes (DASTY), and Unity (U) all provide software that helps businesses design, simulate, and optimize products long before anything is manufactured.
These companies aren’t selling virtual real estate.
They’re selling productivity.
They’re helping businesses reduce costs, shorten development cycles, improve quality, and accelerate innovation.
That’s a much larger opportunity than convincing millions of people to attend virtual concerts.
One of the biggest investing lessons I’ve learned is that revolutionary technologies often arrive in ways nobody originally expected.
The internet wasn’t ultimately about chat rooms.
Cloud computing wasn’t just online file storage.
Artificial intelligence isn’t simply chatbots.
Likewise, I don’t believe the metaverse was ever primarily about virtual avatars.
It was about creating digital environments where people, machines, and now artificial intelligence can learn, collaborate, and solve problems faster than they can in the physical world.
Wall Street became obsessed with one narrow vision of the future.
When that vision didn’t materialize immediately, many investors concluded the entire technology had failed.
Instead, it quietly evolved into something far more practical - and potentially much more valuable.
A Metaverse Watchlist
If my thesis is correct, many of the biggest winners won’t be companies building virtual worlds. They’ll be the businesses providing the tools that allow AI, robotics, and industry to operate inside digital environments.
Here are a few names worth watching:
NVIDIA (NVDA) – Omniverse has become one of the leading simulation platforms for robotics, autonomous vehicles, industrial AI, and digital twins. Every major robotics company seems to be building on NVIDIA’s ecosystem.
Autodesk (ADSK) – The leader in computer-aided design (CAD) software. Engineers, architects, and manufacturers increasingly use Autodesk to create digital models before anything is built in the real world.
PTC (PTC) – A leader in industrial software, digital twins, and product lifecycle management. Its software helps manufacturers simulate, monitor, and optimize products throughout their entire lifecycle.
Dassault Systèmes (DASTY) – One of the pioneers in 3D design and simulation software. Its 3DEXPERIENCE platform is widely used in aerospace, automotive, healthcare, and industrial manufacturing.
Siemens AG (SIEGY) – Through Siemens Digital Industries, the company has become one of the world’s largest providers of industrial automation, factory simulation, and digital twin technology.
Cadence Design Systems (CDNS) – Best known for semiconductor design software, but increasingly important in AI-driven system simulation and digital engineering across multiple industries.
The common thread is simple: these companies aren’t betting on people spending their evenings in virtual reality. They’re selling software that helps businesses design better products, train smarter AI models, and reduce costs by solving problems in the digital world before they occur in the physical one.
Tomorrow, we’ll look at another technology that investors have largely moved on from: blockchain. While cryptocurrencies continue grabbing headlines, the underlying technology is quietly finding real-world applications that could reshape finance, supply chains, and digital ownership over the coming decade.
Here’s to the future,
Matt McCall
Editor, Market Insights
