NFT Marketplace Expected to Exceed $25B in Short-Term, Here's How to Get Exposure Through Stocks - Jefferies

Jefferies analyst Stephanie Wissink has weighed in on the booming non-fungible token (NFT) ecosystem and provided advice to investors on how to get exposure to NFTs.

The analyst sees NFTs as three interconnected domains: Metaverse (where NFTs live and evolve, NFTs, and crypto (currency mechanism). Jefferies estimates that the NFT marketplace will exceed $25 billion in the very near term.

“The initial phase of NFT market growth lacked commercial organization, but as brands/companies better sort rights ownership, the market ecosystem is becoming more clear. We expect super fans to collect across both the physical and digital domains. Pricing is still dynamic, with the balance between high-priced exclusives and value-biased NFTs for the masses. The ability of companies to align NFTs and physical newness is a signal that fans are looking across physical and digital collectibles, and the ability to leverage marketing and awareness across modalities is a net positive to profitability potential. We expect toy & games, video game, and collectibles companies to coordinate digital and physical releases to increase cross-platform collector engagement & community building. In fact, 86% of NFT collectors cite community as a reason they collect, according to a survey conducted by Morning Consult,” Wissink said in a client note.

For investors who are looking to gain exposure to NFTs through stocks, Wissink names these stock plays: Hasbro (NASDAQ: HAS), Mattel (NASDAQ: MAT), Funko (NASDAQ: FNKO), and GameStop (NYSE: GME).

From a Metaverse exposure perspective, Wissink outlines Activision Blizzard (NASDAQ: ATVI), Electronic Arts (NASDAQ: EA), Take-Two Interactive (NASDAQ: TTWO), Warner Music Group (NASDAQ: WMG), and Roblox (NASDAQ: RBLX).

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