First correction, then growth

As of July 12, 2024, the market value of the companies included in the index was more than $12.68 trillion, the most in five years. Compared to the March value, this is an increase of around 18%, preceded by three significant corrections in June and early July*.

Metaverse Index evolution over the last 5 years. (Source: Wonderinterest.com)*

Nvidia and Microsoft as drivers

As in March, the main driver of the index is Nvidia (NVDA), which is up a whopping 164 percent year-to-date. The remaining companies have also performed relatively well, with an average increase of around 28 percent. Roblox (RBLX) has not fared well, losing 10 percent since the beginning of the year * Nvidia and Microsoft's weightings in the index remain unchanged. Microsoft (MSFT) remains in first place, followed closely by Nvidia and Alphabet (GOOG) in third place.

The continuing boom in artificial intelligence

The positive trend in the Metaverse Index also reflects the continuing boom in artificial intelligence (AI), which is being fuelled by rapid advances in this area. Investment continues to be high and significant funding is going into R&D, as confirmed by the latest Q2 CIO survey from Citibank, in which 71% of CIOs expect companies to secure new or additional funding for AI-related projects. Overall, they expect a 13% increase in spending and believe Microsoft will be the leader in this regard, far ahead of Amazon and Alphabet. As AI becomes more integrated into everyday life, its potential remains in the spotlight. [1]

A leader in both technology and sustainability

The leader in our index, Microsoft, is particularly well known for its influential role in the development of IT software, cloud services or AI products. The company has other ambitious plans, but it is not forgetting the planet. As part of its green plan to achieve negative carbon emissions by 2030, it is involved in a number of sustainability initiatives, which we have also written about on our blog. Recent collaborations include an agreement with 1PointFive, a subsidiary of Occidental (OXY), to purchase 500,000 tonnes of carbon removal credits over the next six years. This agreement represents the largest single purchase of its kind. 1PointFive is engaged in the capture and use of carbon dioxide and will provide its Stratos facility, currently under construction, for this purpose, and the captured carbon dioxide will be stored underground. This strategy has also resulted in an increase in the value of the company's shares to approximately US$454 per share.

Microsoft's share price performance over the past 5 years (Source: Investing.com)*

Market darling Nvidia

Nvidia remains the clear leader in artificial intelligence with its product line. In early June, it announced a new generation of Ruby chips with improved graphics technology that will enable better training of AI systems. The launch of the Rubin chips, came just three months after the launch of the Blackwell product line, which has been touted as the breakthrough, most powerful, or even superchip. Nvidia's groundbreaking ideas have put its products far ahead of its industry competitors, which is reflected in the company's stock, which was still trading at a record $1,200 per share* in early June. to make the stock even bigger, the company opted for a 10:1 forward split, which took place on June 7, 2024.

Nvdia's share price development over the last 5 years (Source: Investing.com)*

The leadership of Nvidia and Microsoft in the Metaverse index is impressive, but the remaining companies are also contributing significantly to its momentum. Each company brings unique innovations and strategic initiatives that together are shaping the future of digital interaction and technological advancement.

Olivia Lacenová, principal analyst at Wonderinterest Trading Ltd.

* Past performance is no guarantee of future results

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future results. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.