When you think about the Metaverse, you're
probably thinking that it's in the distant future, slowly being built by some of
the biggest corporations in the world. Trillion-dollar companies with secret
underground labs, researching all the different ways they can make money off the
internet and the people using it. Or maybe you think the whole Metaverse thing is just some
sort of gimmick; a scheme put together by video game companies and the entertainment industry
to pump up sales of virtual reality headsets and the low-budget experiences they run. This
episode isn't about Facebook or Meta, and it's definitely not about Mark Zuckerburg's idea of,
uh, whatever this is. [Tiger and the Buffalo Art] I want to show you a different side
of virtual reality. In this episode, I'll show you the current state of the art tech and some of the publicly traded companies using
it to make the world a better place today, including some that ARK Invest doesn't hold,
at least not yet. Your time is valuable, so let's get right into it, starting with the
actual state of the art and how it got here. You're probably already familiar with virtual
reality, or VR, which requires a headset device to immerse you in a completely virtual
setting. And you're probably also familiar with augmented reality, or AR, which overlays
digital objects and information onto the shared reality we call the physical world. That
means you can use it with smartphones, tablets, and even hands-free glasses. But there's another
application called mixed reality - not AR, not VR, but MR - where physical and digital objects
and environments can co-exist and interact in real-time. This isn't the distant future. It's the
state of the art in engineering and design today, from architecture to aerospace to automotive.
All kinds of new products and services are made possible by mixed-reality technologies. On the
software side, mixed reality drastically increases productivity and reduces time to value for one
simple reason: people can create organically, using their hands, instead of having to learn
industry-specific software, tools, and processes. Designers can swap parts and make adjustments to
a model by interacting with it in mixed reality and the modeling software translates and tracks
those changes in the background. We'll get back to these companies later in the episode. On
the hardware side, full visual immersion has already been reached, although it does
have a pretty big catch: we're only talking about objects that can be made to look
photorealistic with industrial-grade software. So we're not talking about giant robots or epic
space battles, or even human faces just yet. It's important to talk about VR headsets because
nothing else really matters if you don't believe they're getting close to being ready for
prime time. They're actually a lot further along than most people think. Heck, they're
a lot further along than most experts think. Here's what ARK Invest has to say about the
state of virtual reality and visual immersion. According to their 2021 Big Ideas Report, the
best-in-class VR headsets today achieve only 10% of human visual immersion. If consumer
VR is limited to the console gaming market, ARK Invest believes that fully immersive VR
headsets won't reach mass-market adoption in the same way that cell phones have. And to
reach that level of complete visual immersion at a reasonable price, VR headsets basically need to
follow the same adoption curve as the cell phone for the next 10 years - from now, until 2030.
Yikes! Well, let me show you that consumer VR may not be limited to the console gaming market
for too much longer. This is the Varjo XR headset. It uses two 12 megapixel cameras to pass video
of the real world into the headset displays. It also has about the same color range as
the real world, so photorealism isn't lost thanks to off-colors or limited lighting
and rendering capabilities. The Varjo XR headset uses a built-in LIDAR to calculate
the range of real objects in the environment and decide how to scale the virtual objects in
it, so there's no object jitter or flickering. It has integrated hand and eye-tracking to keep
interactions as natural and fluid as possible. This blows the doors off industrial use-cases
because you can bring physical objects into the digital space. For example, pilots can bring
real checklists to a flight simulator and use their real hands to check things off as they go,
as opposed to the VR controllers we're thinking of for video games. Or, they can sit in a real
cockpit but fly a simulated flight with the aircraft turned completely off. Can you tell what
part of this scene is fake? Well, it's actually the entire scene. That's the power of mixed
reality. And of course, that power can be used to simulate computer monitors or screens of any
size and shape. Think about all of the different devices with screens you have today. Your phone,
your TV, your laptop or desktop computer, maybe an extra monitor or a tablet off to the side. Why
not just digitally simulate whatever computer and displays you want depending on the physical
environment you're actually in at the time? The possibilities are endless AND more convenient;
after all, this headset is smaller than your physical laptop. The only problem is... the Varjo
XR-3 headset is almost $8000. [disc scratch] These things are basically the Tesla Roadster of
headsets. That's actually what stopped me from making this episode sooner. ARK Invest is
right; no one except the wealthiest enthusiasts can afford these things right now, so they'll
never reach mass-market adoption at this rate. But, just like Tesla keeps innovating and
has moved downmarket since the Roadster, Varjo just released a $2000 dollar version of its
headset, called the Aero. While the Aero strips out a lot of the industrial-grade features like
the pass-through cameras and the LIDAR, it doesn't lose any of the VR functionality from Varjo's
$8000 XR-3 headset. That means industrial-grade VR is now available at around the same price point as
a flagship smartphone and costs will only continue to decline over time, just like Tesla's cars and
personal computers and laptops and cell phones. ThrillSeeker is a great YouTuber who focuses on
all things virtual and augmented reality. Here are some of his first impressions of the Varjo
Aero VR headset. [ThrillSeeker Clips with Audio] If you're interested in learning more about the
state of the art of AR and VR, Thrill Seeker is a great channel to follow. I'll leave a link to
his deep dives on Varjo in the description below. Hopefully, you're starting to see that the
state-of-the-art for VR is being pushed forward by industrial applications, not just video games, and
amazing hardware is quickly coming down in cost, which will drive consumer adoption way up. As a
fellow investor, I think seeing this context is really valuable, so I appreciate you sticking with
me so far. Varjo isn't a publicly-traded company, at least not yet, so let's talk about the
companies that are. I think there are three kinds of companies that are important to industrial
VR. The first kind focuses on the infrastructure. Not just headsets but virtual collaboration
environments and platforms. The second kind focuses on digitizing physical stuff -- they scan
objects and environments in the real world and let people interact with their digital twin. The third
kind focuses on designing physical stuff -- they let people build objects and environments in a
digital world and then produce their physical twin, which usually ends up being a product.
Together, these types of companies are great long-term investments today because they offer
state-of-the-art products and services right now. Those offerings will scale very well into the
metaverse as VR technology continues to mature and become more affordable but doesn't rely
on that idea to succeed. So, if you want to bet on the Metaverse but against Facebook and Meta
Platforms, these stocks are a great way to do it. Let's start with Nvidia, ticker symbol N V D A.
Nvidia makes the GeForce line of graphics cards, as well as tons of enterprise hardware and
software for every type of artificial intelligence application you can think of. They also build
the superpods, which are their commercially available supercomputers specifically designed
for artificial intelligence, as well as their DGX station, which is their server solution for data
centers. In my opinion, these machines or machines like them will run a serious portion of the
metaverse. Last week, NVidia held their annual GPU Technology Conference, or GTC, where they heavily
featured their Omniverse initiative. [Short clip of Jensen Huang] The Omniverse is a scalable,
real-time development platform for collaborative 3D design and simulation. At the foundation of the
Omniverse is Pixar's open-source USD, which stands for universal scene description. This layer allows
large groups of people to work simultaneously across multiple software applications on a shared
3D scene, whether it's an automotive factory floor or the set of a movie. This open standard
foundation gives software partners multiple ways to extend and connect to Omniverse, whether
through USD adoption and support, or building a plugin, or via an Omniverse Connector. That
means Nvidia's Omniverse is an ecosystem of development tools and assets that grows whenever
a partner adds functionality to it. For example, Apple, Pixar, and NVIDIA have collaborated to
bring advanced physics capabilities to USD. NVIDIA and Adobe are collaborating on a Substance
3D plugin that will unlock new material editing abilities for Omniverse and Substance 3D users.
The list goes on and on, but the point is this Omniverse ecosystem is already connecting leaders
from every industry to be more than the sum of its parts, which means it will gain all sorts of
customers and use-cases in the future. Lockheed Martin is working with Omniverse to develop
strategies for wildfire simulation, prediction, emergency response planning, and fire suppression
efforts. Even South Park, which is obviously the greatest television show of all time, is exploring
Omniverse to enable several of its artists to simultaneously collaborate on scenes and
optimize their insanely limited production time. Next on the list is Matterport, ticker symbol
M T T R. As their name suggests, they focus on porting physical matter into the digital world.
More specifically, Matterport creates digital 3D models of buildings and spaces for a wide variety
of applications. For example, real estate firms can offer virtual tours, and construction firms
can assess the progress of their current projects. Architects and engineers can streamline
documentation and collaborate directly within a correctly-scaled 3d model of a project, instead
of across a lot of different pieces of software. The 3D digital reconstruction market is largely
unpenetrated so Matterport enjoys a huge first-mover advantage. In act, they have around
100 times more spaces mapped than the rest of the market combined. They have a fully automated
end-to-end digitization process that works with a wide variety of compatible capture devices,
including their own cameras as well as cell phone cameras thanks to their android and iPhone
apps. Their revenue increasingly comes from their free-to-paid subscription model, where a team of
2 can digitize a space with their phones for free. Then, if customers want to scale up
their team, digitize more spaces, use better cameras, or export their data
in a wide variety of technical formats, they have to upgrade to a paid monthly plan. That
makes Matterport very scaleable to businesses of all sizes, from individual projects
all the way up to enterprise clients who want to use Matterports integrations with other
Building Information Modeling tools like Revit. Speaking of Revit, the third stock on the list
is Autodesk, ticker symbol A D S K. One of the other big growth drivers for AutoCAD right
now is Revit, which is a leading tool for BIM, or building information modeling. Building
Information Modeling is the process of creating and managing information for a built asset, like
a building. The model integrates different kinds of data, including the structure of the asset,
to produce a digital representation of the asset across its entire lifecycle, from planning
and design, to construction, operations, and maintenance. BIM is quickly becoming mandated for
large civil engineering projects around the world, which is really good for Autodesk in general and
Revit specifically. That's one reason Matterport integrates with it. Autodesk is also famous for
making AutoCAD. C A D stands for computer-aided design and AutoCAD is one of the industry
standards in infrastructure, architecture, city planning, and product design. Chances are,
the device you're watching this video on was designed in or at least mocked up in AutoCAD.
But Autodesk makes much more than AutoCAD. They also make 3DS Max and Maya, which are
visual effects software suites used in Hollywood Blockbusters like Pixar's Monster's Inc, as well
as triple-A video games like the Uncharted series, Call of Duty, and even Halo. So, regardless
of your opinion on the future of the internet and the Metaverse, Autodesk is already positioned
for long-term success. It has in-demand products that are leaders in their respective industries -
AutoCAD for drafting and design, 3DS Max and Maya for visual arts and effects, and Revit for
building information modeling. By the way, Autodesk is one of the companies currently
connecting to Nvidia's omniverse. And finally, we have Unity Software, ticker
symbol U, which allows developers to create 2D and 3D interactive experiences for every
type of platform, including PCs and Macs, gaming consoles, and mobile devices.
Unity's solutions are very scaleable; they support everyone from huge studios that make
multiplayer games requiring powerful computers all the way down to individual
creators who just want to make a simple mobile game. Unity's platform follows
a develop-once-deploy-everywhere model where creators can deploy their work to Playstation,
Xbox, Nintendo, MacOS and iOS, and Android and Windows. This is a big selling point. That means
different operating systems and device makers need to enter into long-term partnerships with
Unity Software, to ensure that creators don't have to learn to write any extra code just to get their
projects onto one specific platform. As a result, Unity's platform has become an industry-standard
content creation tool. By their own estimates, over half of the top 1,000 mobile games
in Apple’s App Store and on Google Play have been created using Unity’s solutions. Their
primary audience right now is game developers, but they're extending their development ecosystem to
support much more than just video games. In fact, Unity has been used to develop nearly 60% percent
of ALL AR and VR content, and something like 90% percent of the content on emerging AR platforms is
made using the Unity engine. They are consistently investing to expand their platforms to
cater to industries like architecture and engineering 3D designs, automotive designs,
3D film, and animation creation. Importantly, Unity Software's biggest competitor is Unreal
Engine, which is owned by Epic Games, the company that makes Fortnite. Epic Games, and thus Unreal
Engine, are not publicly traded. I think that's why Cathie Wood has over 1.5 billion dollars in
Unity Software stock today, making it ARK Invest's 4th biggest position overall. Interestingly
enough, ARK Invest doesn't have a position Nvidia, Matterport, or Autodesk but they haven't
really published anything that suggests why. So, comment below or tweet me at Ticker Symbol
YOU with your thoughts on the current state of VR and these companies that are connecting
the physical and digital world. Do you think the companies I talked about will be key to
the Metaverse or is a different one at the top of your list? Do you think these companies
will continue to succeed even if the metaverse never becomes a reality? I'm excited to hear
your thoughts. As for me, Nvidia and Unity Software are both already in my 100,000 dollar
portfolio on Public dot com. I'm building that portfolio from scratch to compete directly with
ARKK, ARK Invest's flagship innovation fund, which also holds a lot of Unity stock. If you're
interested in following that investing project, consider liking this video and subscribing to the
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with more coverage like this, as well as exactly what I'm putting in that portfolio each month.
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So that free slice of stock when you fund your account is a win-win if I've ever heard one. I'll
leave a link to that exclusive offer for you in the description below as well. Thanks for watching
and until next time, this is Ticker Symbol You. My name is Alex, reminding you that the
best investment you can make... is in you.
