5 Tech Stocks Vying to Win the AR/VR Race

tech stocks - 5 Tech Stocks Vying to Win the AR/VR Race

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The global market for augmented reality (AR) and virtual reality (VR) continues to grow. With both consumer and commercial applications, AR/VR products combined for $6.1 billion in revenue in 2018 — and that’s great news for tech stocks.

Revenue is projected to hit $18.8 billion this year. But in the next few years, potential is there for explosive growth. One recent estimate suggests the global AR/VR industry could be worth $571.24 billion by 2025.

With those kind of numbers, it should come as no surprise that some of the world’s biggest tech companies are duking it out for dominance.

That said, here’s a list of five AR/VR tech stocks that are currently among the leaders in this high-stakes industry.

Tech Stocks to Buy: Facebook (FB)

Tech Stocks to Buy: Facebook (FB)

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In 2014, Facebook (NASDAQ:FB) went all-in on virtual reality, paying $2 billion to buy Oculus VR. The acquisition meant Facebook was suddenly the leader in high-end VR headsets for video gaming technology.

As befits a social media company, Facebook also touted the social implications of Oculus VR, including “creating a new platform for interaction that allows billions of people to connect in a way never before possible.”

In terms of high-end VR headsets, Facebook’s Oculus remains one of the market leaders, with more than double the share of HTC.

Overall, Facebook is a leader in the social media market. And seems to be gaining traction as one of the great tech stocks available to investors.

Sony (SNE)

Tech Stocks to Buy: Sony (SNE)

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Oculus may be a challenger when it comes to premium VR headsets, but Sony (NYSE:SNE) is the overall market leader. Thanks to the relatively affordable PlayStation VR add-on, an estimated 43% of all virtual reality headsets sold in 2018 were from Sony.

That number slipped in 2019, as PlayStation sales slowed. But at CES 2020, SNE revealed it had sold over 5 million PlayStation VR headsets since launch.

The company already announced the forthcoming PlayStation 5 will support the existing VR headset. However, Sony is now expected to release a “PlayStation VR 2” after the new console’s launch — signalling a renewed push into virtual reality gaming.

That said, SNE is looking like a prime choice if investors are looking at possible tech stocks to add to their portfolio.

Alphabet (GOOG, GOOGL)

Tech Stocks to Buy: Alphabet (GOOG, GOOGL)

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Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google was an early innovator in the world of augmented reality. Unfortunately, though, the company suffered a very public misstep. Its $1,500 Google Glass AR glasses turned public opinion against the technology and spawned the term “Glassholes” for the early adopters that shelled out for them.

Google shut down Google Glass for public purchase in 2015, but the hardware found new life in enterprise use thanks to the company’s Glass at Work program. Furthermore, earlier this year, Google announced a 2nd edition of its Google Glass Enterprise AR headset priced at $999.

Google is also pushing AR in its Android mobile operating system, including features such as Google Lens, Live View in Google Maps and AR support in Google Search.

Collectively, these catalysts are causing Google to be looked at as one of the top tech stocks to buy.

Microsoft (MSFT)

Tech Stocks to Buy: Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) has largely dismissed consumer AR/VR technology, instead focusing on commercial applications. There is no VR headset for the Xbox, and apparently no plans to add one any time soon.

However, MSFT has made inroads with its HoloLens AR headset. Although early demos did involve the HoloLens playing Minecraft, Microsoft quickly shifted to a commercial focus.

Moreover, the HoloLens 2 was released in 2019. The $3,500 AR headset counts the U.S. military among its customers after Microsoft won a $479 million contract to supply the army. With the potential to move over 100,000 units to the military alone, HoloLens shows that AR/VR is already big business for Microsoft.

And, that makes MSFT another member of the great tech stocks available to investors.

Apple (AAPL)

Tech Stocks to Buy: Apple (AAPL)

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Unlike the other four companies in this race, Apple (NASDAQ:AAPL) currently has no AR or VR headsets. Although, for years, it has been rumored to be working on its own high tech glasses.

However, Apple has been steadily laying the groundwork to become an augmented reality powerhouse. The company launched its ARKit for iOS devices in 2017. With that, adoption of ARKit has been steady. IKEA released an augmented reality shopping app, while Pokemon Go has become a blockbuster mobile game.

Furthermore, AAPL continues to assemble pieces. This includes buying startups that operate in the AR space — leaving little doubt that the company is nearing the point where it’s ready to pull the trigger and release a commercial hardware product.

It’s possible that Apple’s next big killer product after the iPhone, Apple Watch and AirPods will be AR/VR glasses. And they could be even bigger than the iPhone when it comes to driving AAPL stock growth.

So while Apple is already a monster in its own sense, the company is slowly becoming another option for investors possibly looking to add tech stocks to their portfolio.

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015. As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2020/02/5-tech-stocks-vying-to-win-the-ar-vr-race/.

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