Morgan Stanley and others identify the 5G-metaverse synergy

Since Facebook CEO Mark Zuckerberg announced that the Facebook Group will now be named Meta, there’s been enormous media buzz around the idea of a metaverse. It’s given a boost to a lot of interrelated companies, concepts, and technologies, with 5G stocks prominent among them. 

What is the metaverse?

The metaverse is an alternative universe, a place where you can make relationships, hold conversations, and acquire and trade items just like you do in our physical lives. As well as Facebook, numerous companies plan to bring metaverses into reality. The online game platform Roblox intends to expand into a metaverse1. The classic game Second Life is already a metaverse of a sort. Epic Games recently raised $1 million to build its metaverse2.

However, we haven’t yet seen a true metaverse, where you can move seamlessly from one platform to the next and take your possessions and currency with you. So far, every metaverse is restricted to a single platform. True platform interoperability is still lacking. 

But thought leaders are certain that real metaverses are on their way, albeit some way down the road. Experts at the University of Oulu predict it could happen around 20273.

Which metaverse will we enter?

There’s some difference of opinion about what kind of metaverse will materialize. Mark Zuckerberg envisions a metaverse that takes place entirely in virtual reality (VR), somewhat like the Matrix, where all your interactions take place in a digital world on a VR platform and your physical environment becomes irrelevant4.

But others look forward to a metaverse based on augmented reality (AR), or what Microsoft calls mixed reality (MR)5. Qualcomm calls it “XR,” or extended reality, to include AR, VR, and MR6. An XR metaverse integrates digital and physical worlds, so users live within and interact with the physical world with the addition of a digital layer.  

You might see digital overlays in a physical store, follow digital directions in the street, and see hazards flagged (unobtrusively) on your windscreen as you drive. We’re already adopting some aspects of the XR-style multiverse, such as AR filters for Instagram images, AR makeup apps, and “try it on” tools on some fashion retail websites. 

Sam George, Corporate VP of Azure IoT at Microsoft, wrote about the convergence of physical and digital worlds into connected environments. He explains it as based on digital twins, where you create a digital model of a physical space or item and connect both versions with IoT (Internet of Things). Real time updates travel between both versions to keep them constantly in sync. “As these spaces come together, they create a new world of opportunity and transformative solutions that will change everything. We think of these solutions as metaverse apps,” he wrote.7

The metaverse relies on 5G

Facebook’s fully-virtual vision can be enabled by fiber optic broadband connections and wireless internet, since you’d never leave your home. But a richer XR metaverse requires lag-free, latency-free digital experiences that respond instantly to your movements and surroundings, and produce results in real time. 

PCMag’s lead mobile analyst, Sascha Seagan, refers to extended AR experiences as the 5G metaverse, saying “The 5G metaverse is all about AR—it’s about going out into the world and enhancing it.”8 According to tech reporter Reinhardt Krause, “Simply put, the metaverse will not exist without next-generation wireless connections.9” 

Neville Ray, T-Mobile’s President of Technology, predicts that “eyewear wearables,” namely ordinary-looking glasses with a digital overlay, will be the doorway into the 5G metaverse10. These glasses will demand low latency, so you don’t get dizzy or confused by a mismatch between what you see in your glasses and what you see through your glasses, as well as high throughput, both of which rely on 5G networks.

According to Qualcomm, the 5G metaverse needs latency under 7ms. That means increasing mobile edge computing, which puts more compute power in base stations and local network hubs.  To achieve that, you need a standalone 5G system on mid-band airwaves, not one that shares a 4G network11. Ericsson, Qualcomm and other partners are already rolling this out12.

5G stocks are benefiting from the metaverse buzz

According to Morgan Stanley, the metaverse represents an $8 trillion addressable market. “Ever since Facebook’s recent name change and new focus on the ‘metaverse,’ there has been massive interest in the concept of a virtual world which could replace today’s internet—and that means a massive new opportunity for investors.”13

Tristan Gerra, Wall Street Analyst at Robert W. Baird, sees Nvidia’s metaverse offering, Omniverse, as a key revenue driver. “Omniverse represents one of the most important initiatives for Nvidia. It’s about 3D simulation, 3D immersive worlds and 3D e-commerce,” he wrote in a note to clients. “This creates a new massive use case for Nvidia’s GPUs in a new secular growth trend which will span decades.14

All of this is good news for top 5G stocks like Qualcomm, Alphabet, Ericsson, and Microsoft, as well as for digital platforms like Roblox and Meta. Investors are increasingly searching for the best 5G stocks to buy so they can be part of this exciting emergent technology. Instead of hunting for the top 5G companies to invest in, people ready to invest in 5G can also turn to a 5G ETF like Defiance’s FIVG. With an ETF, a single investment is spread across a number of promising 5G companies’ stocks, versus the concentration of single stock investing. 

1 “Roblox wants to build the Metaverse. Can it?” July 4, 2021 

2 “Announcing a $1 Billion Funding Round to Support Epic’s Long-Term Vision for the Metaverse” April 13, 2021 

3 “Why You Won’t Really Feel 5G Until 2027” October 15, 2021 

4 “Watch Mark Zuckerberg play Jenga and fist-bump in virtual reality using ‘haptic gloves’ that Facebook, now Meta, is building to let people feel objects in the metaverse” November 17, 2021 

5 “What is Mixed Reality?” October 22, 2021 

6 “XR is the future of mobile computing. We are making mobile XR a reality.” no date 

7 “Converging the physical and digital with digital twins, mixed reality, and metaverse apps” May 26, 2021 

8 “The Real 5G Metaverse Will Blow Facebook’s Meta Out of the Water” October 29, 2021 

9 “5G Stocks To Buy And Watch: How The Metaverse Could Give 5G Wireless And 6G A Boost” November 16, 2021 

10 “T-Mobile’s Tech King Looks to Wearables for 5G” October 289, 2021 

11 “The Real 5G Metaverse Will Blow Facebook’s Meta Out of the Water” October 29, 2021 

12  “Qualcomm, Ericsson, Swisscom and Oppo Achieve 5G Standalone Milestones with 5G Carrier Aggregation and 5G Voice” December 17, 2020 

“stc and Ericsson forge ahead with 5G Standalone for consumers and enterprises” August 10, 2021 

“Singtel enters 5G standalone era powered by Ericsson” September 22, 2021 

“Vodafone partners with Ericsson to deploy Europe’s largest commercial 5G Standalone network” April 12, 2021 “Virgin Media O2 selects Ericsson 5G Core to power Standalone network” July 26, 2021

13 “Here Are Morgan Stanley’s Top Stock Picks For Investing In The Metaverse” November 16, 2021 

14 “5G Stocks To Buy And Watch: How The Metaverse Could Give 5G Wireless And 6G A Boost” November 16, 2021