Buy This Long-Term Tech Stock Right Now

Start the conversation

Leave a Reply Click here to cancel reply.

You must be logged in to post a comment.

Tech stocks have had a rough couple of months. While some were hit harder by the sell-off than others, there's no denying that developing tech still presents a great opportunity that some benefit more from than others.

While this isn't a pure play on the metaverse, it is one of the best long-term tech stocks to buy right now that will benefit from its development.

As it stands now, the metaverse will be one of the most significant innovations in digital technology since the internet - one that will be worth between $390 billion and $800 billion by 2025 or so.

This tech stock benefits from the metaverse, but it also has a slice of the $300 billion gaming industry.

So, let's look at a long-term tech to buy right now...

Unity Software Inc.

Meta Platforms Inc. (NASDAQ: FB) might've put the metaverse on the map. Still, Unity Software Inc. (NYSE: U) stands to be the ultimate beneficiary if virtual worlds become mainstream.

That's because digital creators across industries have been using Unity for its 3D-animation tools, augmented reality (AR), and virtual reality (VR) tech for quite some time. The company has been aggressively acquiring companies with relevant tech to improve its offerings in the digital software industry.

With Morgan Stanley projecting that the AR/VR market will grow to $100 billion in 2030 and $500 billion by 2040, Unity is expected to offer a stellar performance moving forward. And there's a massive push for these interactive platforms - such as the metaverse - which creates an incredible growth opportunity for Unity.

In the fourth quarter of 2021 alone, Unity had 3.9 billion monthly users, making for a growth of 44% year over year; the company's software had 5 billion monthly downloads in 2021.

That's because Unity raised its expected total addressable market from $29 billion in 2020 to $45 billion by the end of 2021. That increase reflects the robust demand for Unity's immersive, real-time 3D tech across multiple industries, such as gaming, e-commerce, automotive, architecture, media, and entertainment.

And it helps that Unity is already a dominant company when it comes to the gaming industry.

Unity was - and still is - mainly used for video games. Its software is used to develop almost half of all PC and console games. And roughly 70% of mobile games were developed using Unity. This market brought in more than $76 billion by the end of 2020.

Unity provides solutions to simplify cross-platform multiplayer game development with its gaming services, a popular segment for most gamers. And as the hardware improves as companies like Advanced Micro Devices (NASDAQ: AMD) and NVIDIA Corp. (NASDAQ: NVDA) develop next-gen gaming and cloud-centric CPUs and GPUs, intrigue in the metaverse is bound to rise - with Unity remaining a key player.

But Unity is more than just a development tool for video games.

Unity also has numerous applications within the architecture industry that give developers a unique advantage. That can use its software to remake building plans into a VR space for 3D visualization before construction. This can cut down on unnecessary costs and give firms a better sense of what they're working toward.

With its suite of tools, Unity has proven to aid creators through the entire lifecycle of a runtime project, from ideation to launch, monetization through ads, hosting, and even analytics to drive revenue growth.

Unity has also been used to develop virtual concerts, sporting events, and live conferences. For any metaverse to exist, a world needs to be built. This is where Unity comes into play, its software serving as the tools to forge detailed digital environments.

And Unity CEO John Riccitiello is all in when it comes to the metaverse. He plans to "support and shape the metaverse" and "emphasize content creation, cross-platform access, and narrowing the distance and reducing the friction between creators and consumers."

Riccitiello aims to claim a significant market share of the metaverse, a market that could be worth more than $10 trillion by 2030.

As the metaverse moves into the mainstream and more companies invest in the technology, Unity will be at the center - pushing the stock even higher over the long run.

But how high could Unity stock go?

Unity Stock Forecast: Potential Gains of 380% or More

Well, folks. Despite the 70% hit that Unity stock took during the massive tech sell-off, U could still make some impressive moves higher. As the saying goes: The proof is in the pudding.

Unity is a company with a strong balance sheet.

It has grown its revenue by 42.85% per year for the past three years. The company reported revenue of $1.11 billion in 2021 - a massive increase of 43.7% year over year.

When we look closer at the individual segments, Unity's Create revenue grew 41% to $326 million. Its non-gaming part is growing 70%, accounting for 25% of its total Create revenue - an increase of 20% over 2020. Not to mention that the Operate segment grew 51% to $709 million.

That's some fantastic from this tech company near the center of the metaverse movement.

Unity expects to rake in revenue growth of 31.05% over the next four years. And Unity is forecast to hit revenue of $1.49 billion in 2022 for an increase of 34.2% while sustaining an operating margin of over 30% from 2026 and on.

Of course, this all hinges on Unity's ability to sustain this trajectory. That does make this a bit of speculative investment. But with this tech stock trading at a steep discount - down 73% from its previous high of $210 - it's a hard opportunity to pass on.

Unity's stock is an attractive offer at current market prices, given its massive potential in the gaming and metaverse world. This massive undervaluation provides interested investors with an excellent entry point.

As far as what to expect in terms of returns, if you were to invest in Unity stock at today's price of $40.45 per share, you could see potential returns of more than 380%.

Analysts at CNN set a median target price of $61 per share for a modest gain of 51% over the next 12 months. On the higher end, shares of U are forecasted to hit $194 per share - far closer to the previous highs of $210. If that were to happen, you could see potential gains of 380% over the next 12 months.

While that's an impressive one-year return, keep in mind that Unity is a long-term investment. As the tech evolves and matures, that's where Unity stock will really hit its stride.