Analyst: Big Tech Stocks Will Benefit From Metaverse And Crypto, But Apple Growth Least Likely

Cyrus Mewawalla, head of thematic research at data analysis and consulting firm GlobalData, reportedly said that thanks to the development of emerging technologies such as the metaverse and cryptocurrencies, large U.S. tech stocks will shrug off inflation this year. , continue to rise, but Apple is the least likely to grow.

Tech companies in the metaverse, Web 3.0, cryptocurrencies and quantum computing will benefit from the development of emerging technological forces, Mewara said. "If you get into this space, you're going to benefit from it regardless of macroeconomic conditions," he said.

The tech-heavy Nasdaq 100 fell nearly 1 percent on Monday. Additionally, the S&P 500 and Nasdaq Composite have fallen for four straight days. The stock market has had a rough start to the year as interest rates have also surged.

Tech giants are investing billions of dollars in new technologies that promise to revolutionize the way people live and work.

Late last year, Facebook changed the company's name to Meta, underscoring its focus on the so-called "metaverse." In this virtual world, people can interact with others through digital avatars that can be controlled through virtual reality headsets such as Oculus. Companies like Google and Microsoft have also developed VR headsets, and Apple is rumored to be in the works.

Currently, several tech giants are working on commercial applications of quantum computers, and Meta is planning to launch a cryptocurrency called Diem. But so far, most giants remain silent on Web 3.0, known as the "next-generation Internet."

Apple's warning

Last week, Apple’s market value topped $3 trillion at one point. But according to Mewara, Apple's stock price may not rise as much this year as some other big tech companies.

"Apple is perhaps the least likely company to grow from here in terms of maintaining its valuation," he said. "It has a strong ecosystem and strong execution, so I see little downside risk. Also, I think Other large tech stocks have more upside potential."

Asked if Apple could have more surprises this year, Meevawala said Apple CEO Tim Cook has been "absolutely amazing" over the past 10 years, raising Apple's market value from around $350 billion to $3 trillion.

"But during this time, there's been very little innovation other than the Apple Watch, which is really an extension of iOS," Mewara said. "The Apple TV is a failure because it's not a A real new product. Now there are rumors that Apple is going to launch something like an electric car, it could be a self-driving car, it could be smart glasses, it could be related to the Metaverse. But that's not known yet.”

Amazon and Google parent Alphabet are the most affected in terms of regulation. Meevawala said they faced data, privacy, antitrust and copyright issues. Even so, he doesn't think there will be any "major" events in the near future.

On the M&A front, Mewara said future M&A deals would be "highly constrained". He added that the UK and other countries are introducing new merger and acquisition laws to prevent companies from getting too big.

"I think acquisition strategies have to change and companies have to take into account greater regulatory scrutiny," Mewara said.