The UAE is positioning itself as a hotbed of innovative development when it comes to the world of Web 3.0. A combination of progressive regulation and a willingness for local financiers to back start-ups means there’s no shortage of smaller companies in this space, but for those looking to invest through more traditional channels, what are the options?
Three listed companies in the sector, all of which trade their stock on the Abu Dhabi market, come to mind. Namely, Phoenix Group, Presight AI and Space42.
Phoenix Group
Phoenix Group claims that it is building the largest Web3 ecosystem in the Middle East and is the first cryptocurrency firm to be listed on the Abu Dhabi exchange. With a current market cap of just over Dhs6 billion, the company came to market in December 2023, but it’s been a turbulent ride for the valuation since then. A 15% stake in the business was offered, with shares priced at Dhs1.5 each. Gains on day one were impressive, with the stock trading as high as Dhs2.5 but it’s been a steady trend lower since.
Indeed, full year earnings numbers were released on February 12th and underlined the challenges faced by the business. Assets were up from US$834m to US$962m, but revenues were down by more than 25%, whilst earnings per share dropped by 30%. Management noted that the company’s venture into bitcoin mining was performing well with another year of significant growth being posted as revenues here rose by 236%.
In addition to the bitcoin mining, the company has holdings in M2, the Abu Dhabi based, regulated crypto investment platform; Lyvely, a SocialFi platform that allows creatives to monetise their online presence; the luxury auction platform Falcons; blockchain consultancy Rekt Studios; a cloud mining and hosting venture; and Phoenix store, a physical outlet which distributes WhatsMiner products.
That core bitcoin operation is evidently performing well, but are the peripheral investments proving to be too much of a distraction? With shares now trading at just over 1Dhs, so down 60% from the all time highs, investors clearly have concerns.
Presight AI
Presight AI combines big data analytics and AI expertise to “enable lifelong human advancement” according to the website, operating across multiple vertical industries including Public Services, Energy, Finance and Education. The company IPO’d in March 2023 in a hugely popular float that was reported as being 136 times oversubscribed.
This demand underlines the sheer volume of “dry powder” capital that sits in the region with investors keen to get in on the next big deal. Shares were prices at Dhs1.34 on debut, before soaring beyond Dhs3 on the first day of trade, then topping out above Dhs3.70. It has been a volatile ride since with shares trading as low at Dhs1.70 in February 2024 before recovering some of those losses, but the lack of enthusiasm from investors belies the financials. Revenues in 2024 reached Dhs2.2bn, up by more than 20% from the previous year, whilst gross profits improved more than 40% over the same time period.
Even the quarterly earnings update published in February 2025 failed to galvanise sentiment amongst investors. That was despite revenues coming in ahead of analyst forecasts, the order backlog increasing and forward-looking guidance being revised higher, too. One small caveat was an adjustment in the outlook for net income as management accounted for changing taxes, but the market remains cool. However with the NVIDIA share price now plateauing and the risk that powerful chipsets could be harder to find, the wariness may be justifiable – although at some point there’s surely value to be had?
Space42
Space42 is the product of the recent merger between the satellite company Yahsat and AI play Bayanat. The combined entity made its market debut in October 2024, but again the picture in terms of share price performance is far from stellar. The valuation is off by more than 20% over the last five months – and much of that came off the back of the February 2025 filing of preliminary full year results – giving the company a market cap of Dhs 9 billion at the time of writing.
There’s no shortage of positive news here with the company launching a communications satellite via Elon Musk’s Space-X rocket out of Florida early in the new year, partnership deals to make satellites in the UAE and multi-billion Dirham deals with the government being reported too, but it seems that the recent numbers have left investors somewhat underwhelmed. Whilst those preliminary results show that 2024 saw a significant uptick in assets, revenues were barely higher and earnings per share fell by 20%. The merger makes longer term comparatives difficult to observe, but with all three of our examples here showing weakness in the valuation is there a common theme?
The NVIDIA success story has been difficult to avoid with meteoric growth being observed for the company’s valuation, but a popular trend in recent years has been the fact that gains here may have been at the expense of the smaller, innovative players. In the US, the likes of Five9 – shares down 50% since 2022 – or Blackline, which is around 25% lower over the same period, suggest the biggest players may have had a gravitational pull amongst investors. AI and the wider Web 3.0 world isn’t going anywhere, and the UAE remains primed for growth and innovation. The challenge right now principally seems to be one of market timing.
Tony Cross is a seasoned market commentator with over 15 years of experience, delivering engaging and insightful content for both journalists and investors. Specializing in macroeconomics, UK blue-chip equities, and intermarket analysis, his commentary is highly valued for its clarity and its knack for eliminating unnecessary jargon.
You can contact Tony on tony@goodmoneyguide.com
