By now, you’ve probably heard plenty about Microsoft’s deal to buy Activision Blizzard.

The $68.7 billion deal would be Microsoft’s largest-ever, dwarfing its $26.2 billion purchase of LinkedIn in June of 2016.

In fact, this newest blockbuster represents the biggest all-cash acquisition in history.

When you consider the carry-forward implications of this deal, this is clearly Microsoft’s attempt to transform its future to include the metaverse.

In fact, if you follow the Wall Street breadcrumbs, it’s clear that video games now represent the ultimate key to monetizing this new “metaverse world” that we’re living in.

And to me, this leads directly to a platform like Roblox (NYSE: RBLX).

In fact, if there’s one major takeaway from this Microsoft deal, it’s how powerful the future of Roblox looks.

A Universe of User-Generated 3D Virtual Worlds

Roblox already has a massive – and very young – following in its in-game virtual universe, where kids can engage in open-ended play.

For the most part, Roblox is free to join and to use. Here’s a brief breakdown of what the company offers.

• Roblox Client: Where users explore 3D digital worlds
• Roblox Studio: The tool set that allows developers and creators to build, publish and operate 3D experiences
• Roblox Cloud: The service and infrastructure that powers the company’s co-experience platform

What makes Roblox unique is that it empowers its users to create their own games.

Anyone who develops something that the members of the metaverse embrace can receive 30% of the proceeds generated in the game – including from things like the sale of virtual outfits and avatars.

Certain experiences cost “Robux” which are used as in-game currency. But just like tokens at the video arcade, all Robux must be purchased using real money.

Basically, Roblox has tens of millions of incentivized third-party developers constantly making the company better.

That may sound like an enormous number, but I’m not making it up…

As of the third quarter of 2021, Roblox had more than 47.3 million daily active users worldwide. Better yet, Roblox users tend to be young – the core demographic ranges from 9 to 15 years old.

Just imagine the brainpower and constant development/improvement to its platform Roblox will get from this young generation of computer nerds – essentially free of charge!

Roblox vice president of brand partnerships Christina Wootton believes that the Roblox metaverse will soon become bigger than video games.

She recently said…

The metaverse is bigger than gaming. We’re ushering in this new category of human co-experience. It’s an immersive place where people can come and connect with one another and have shared virtual experiences. They can do things together, such as work, learn, play, shop and experience entertainment.

Of course, there’s huge competition…

The Facebook name-change to Meta Platforms is a clear indication that there is now a major competitor in the space – one with 2 billion users. Luckily, Facebook is just entering the sector. Roblox has the first-mover advantage and a multiyear head start.

Major companies are now choosing to go into the metaverse using Roblox.

On November 18, 2021, Nike (NYSE: NKE) launched a new, immersive world experience called “Nikeland.” And it chose to create this world on Roblox. When you enter Nikeland, you can engage with a digital showroom to dress your avatar in Nike apparel – while also checking out Nike’s newest and most innovative products.

Roblox executives have discussed the possibility of similar meta-themed worlds with penetration into every imaginable market sector – from education to music – predicting that all consumer brands will need a Roblox strategy in the next three to five years.

Roblox is scheduled to report fiscal 2021 fourth quarter earnings on February 15, which could trigger more volatility. Regardless, the metaverse is a future cash machine that is here to stay, and Roblox is the true pioneer in the space.

The pandemic has attracted millions of kids onto the Roblox platform and has given birth to an entirely new digital world that represents the next great future of technological advancement. This could be bigger than video games. Before you know it, all consumer brands will need a Roblox strategy.

If you believe (as I do) that the metaverse will only get bigger, Roblox should have a spot in your portfolio – starting immediately. Morgan Stanley analyst Brian Nowak is in. He just raised his price target to $150 per share.

Given all this, the January 2022 technology pullback represents an attractive entry point for Roblox.

Action Plan: After closing for $70 on its first day of trading, the stock shot up to a high of $140. As you can see, the stock has since dropped by more than 55% – which offers you the chance to get positioned for cheap.

Karim and I are bringing picks like Roblox to the table every Wednesday afternoon in Trade of the Day Plus. And we are guaranteeing we beat our 83% win rate. Join us today to get in before this Wednesday’s pick drops!

Monday Market Minute

• The most attractive earnings candidates this week report on Thursday – which could lead to some big overnight moves. Click HERE to see how to win big if a stock moves up or down – it just has to move!
• Estimated short interest in Bed Bath & Beyond (Nasdaq: BBBY) went up for the third consecutive week, rising more than 40% and hitting a new 52-week high. That didn’t stop us from ringing the register on the retail giant in The War Room this morning.
• We’re seeing a move into “risk on” assets like the Ark Innovation ETF (NYSE: ARKK). Are the market makers getting themselves positioned for a bounce-back in February? We’ll have the answer in The War Room.