Analysts have been pondering what will happen next to the price of Facebook Inc (FB) stock, and they believe things are looking up.
According to David Zeiler of Money Morning, the social media behemoth is in a great position from which to profit from the next revolution in tech. Zeiler says that the stock is set for another bull run even after its stellar performance in the past few years.
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However this growth will not be powered by social media, where Facebook Inc (NASDAQ:FB) has become dominant. Rather it will be inspired by another, young industry that will boost the company stock price past the $250 barrier.
Now you may be thinking that is around double its current price, and you would be right. It means that you could potentially double your money if you buy shares in Facebook Inc (NASDAQ:FB) today.
The driving force behind this growth will be virtual reality. Facebook Inc (NASDAQ:FB) CEO Mark Zuckerberg has been aware of the potential for years. Not for nothing did he splash out $2.1 billion on Oculus Rift in 2014.
Some analysts believed that the acquisition was a bad idea from Zuckerberg, and claimed that Oculus Rift was nothing but a glorified gaming platform. However the acquisition means far more than that.
“One day, we believe this kind of immersive, augmented reality will become a part of daily life for billions of people,” Zuckerberg said at the time. It now looks as though he knew exactly what he was doing.
How will Facebook (FB) monetize virtual reality?
Facebook Inc (NASDAQ:FB) is now in a perfect position to profit from the growth potential of virtual reality in coming years. The company’s acquisition of Oculus Rift sparked a round of investments in virtual reality that looks set to stoke a boom in the industry.
For six quarters before the Facebook Inc (NASDAQ:FB) deal, 50 investments for a total of $316 million were made. For six quarters after the acquisition, $1.1 billion in investments were made over 91 deals.
It also has a strategy to make Oculus Rift the most important platform in that market, beating off rivals such as HTC. Facebook’s experience in social media will help it to make virtual reality a social experience rather than relying only on games.
Facebook Inc (NASDAQ:FB) also stands to monetize virtual reality to a greater extent than its rivals. This is due to the company’s $20.6 billion cash reserves, which can be used to fuel the growth of Oculus Rift. The social media giant also has vast experience in driving ad revenues, and virtual reality advertising could boom as the platform becomes more common.
The full report is available to read on Money Morning, where Zeiler sets out a detailed case for buying Facebook stock due to future growth in virtual reality.
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It’s working for me. Bought 3000 shares of Facebook a couple of years ago :-)
at 250 the market cap would be close to Apple, but FB is nowhere near Apple’s profit/revenue. Even if FB has lots of opportunities for growth. It’s already priced into the share price. Avoid stocks that are priced for perfection.
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