As companies and consumers grow more interested in the metaverse, Best Buy could cash in by selling more virtual reality headsets and pricier computers, an analyst says.
A research note published Monday by Loop Capital Markets said the consumer electronics retailer is well-positioned to tap into enthusiasm for nonfungible tokens, gaming and socializing in a virtual world. Best Buy is the largest PC retailer in the country, has big-box stores where shoppers can try on different headsets and has a team of tech experts who charge for helping consumers with setup, said Anthony Chukumba, the equity research firm’s managing director.
He reiterated Loop’s buy rating and price target of $150, about 52% higher than where Best Buy is currently trading. Best Buy’s shares are up about 1% as of midday Monday. They have fallen about 9% over the past 12 months.
A growing list of retailers from Nike to Ralph Lauren have dipped their toes into the metaverse. Nike bought virtual sneaker company RTFKT for an undisclosed sum in December. Ralph Lauren has experimented with ways that people can visit or shop at virtual stores on gaming platforms like Roblox and Zepeto.
For Best Buy, the financial opportunity is even simpler, Chukumba said: Consumers may need to upgrade computers to higher-resolution displays and buy extra equipment from monitors to microphones. That could drive a “massive PC upgrade cycle” and one for smartphones, too, he said.
Loop based its views on a conversation with an unnamed CEO and venture capitalist who specializes in NFTs, blockchain, decentralized finance, gaming and the metaverse, Chukumba said. He added, the person has worked in the tech industry since the late 1990s.
With the metaverse, two other merchandise categories — virtual reality and artificial reality devices and videogame consoles– may also gain steam, Chukumba said. Best Buy already has relationships with the major manufacturers that sell those devices, including Meta (formerly known as Facebook and the owner of Oculus), Sony and Apple. Apple is expected to have a VR/AR product coming soon.
Best Buy also has stores where consumers can try on and compare different headsets in person.
Another aspect of the metaverse could help Best Buy, too, Chukumba said. The technology could make it quicker and cheaper to run warehouse simulations that inspire more efficient ways to operate.