Many believed augmented reality was nothing but a fad. Like other popular tech concepts, AR was very expensive when it first debuted, making it hard to support. However, especially after the release of the hugely popular Pokemon GO in 2016, investors are now taking augmented reality stocks seriously.
Adoption rates for AR and virtual reality have grown tremendously in the past few years. The IDC reports that consumer spending on AR/VR will reach $18.8 billion by 2020.
AR/VR is almost synonymous with modern-day gaming, and will be a huge catalyst for its growth in the future. However, with the improvement in technologies and the diversity in business needs, applications for other industries are also growing.
Almost all major sectors, including healthcare, construction and tourism, are using AR. Contrary to popular belief, the 2020 XR Industry Insight report indicates that approximately 65% of AR companies are working on industrial applications. Why does this matter? Well, it proves there is a huge runway for this technology.
Let’s now look at three of the top augmented reality stocks for real profits.
Augmented Reality Stocks: Apple (AAPL)
Apple is among the more innovative companies in the world, and it continues to use technology to make it more business-friendly. Unsurprisingly, it is placing big bets on AR and leveraging the technology to expand its product ecosystem.
Even CEO Tim Cook recently acknowledged the importance of augmented reality, saying that “AR is the next big thing.”
Perhaps the company’s first significant move in leveraging AR was its release of its ARKit in 2017. The software development kit allows for the creation of AR applications, and it gives Apple the ability to promote itself as having the world’s largest AR platform.
Additionally, the company is also working on its smart glasses and an AR/VR headset. Apple will be launching its smart glasses in spring 2021 and its AR/VR headset, comparable to Facebook’s (NASDAQ:FB) Oculus Quest. Importantly, these developments go beyond gaming and entertainment. Expect to see this AR/VR tech used in a variety of sectors.
With new developments in the pipeline and the CEO’s commitment toward expanding the use of AR, expect Apple to become a juggernaut in this space.
Autodesk (ADSK)
If you’ve studied architecture or design, you probably have heard about AutoCAD. The software package is used by construction professionals, engineers and others in developing 3D designs. Plus, the 12-month total return for ADSK stock is a healthy 70.1%.
AutoCAD has come a long way since its first iteration in 1982. Today, the software is deployed using the company’s construction cloud network, with over a million users. The software now uses a combination of AR/VR in visualizing structures and other operations before they’re built. These technologies streamline the development process providing greater value to customers.
Additionally, ADSK management has set lofty goals to grow 16%-18% over the next three years. It seems to be doing well so far, with a 20% year-over-year growth in its top line in the first quarter.
Augmented Reality Stocks: Qualcomm (QCOM)
Qualcomm has been making some serious waves in the AR world with its mobile chipsets. How? Fortunately for the company, its chipsets satisfy the diverse requirements of AR headsets. Underlining this reality is Qualcomm’s claim that the “mass adoption of highly mobile, intelligent, always-on AR glasses requires the next level of ubiquitous connectivity solutions.”
A little confused? Qualcomm suggests that up-and-coming AR glasses will have certain tech requirements to work. It sees itself as being the best provider of those chipsets, and therefore a great augmented reality stock to buy.
Qualcomm also predicts that 5G-enabled XR glasses, which are essentially AR/VR headsets, will disrupt the smartphone market. Users are looking for more immersive experiences, and with 5G connectivity, AR/VR headsets could prove to be a gamechanger. Hence, Qualcomm recently announced its collaboration with 15 operators from around the world in delivering cutting-edge XR viewers.
Additionally, it recently introduced its 5G chipset platform called the XR2, explicitly designed for AR/VR products. The creator of the uber-popular Pokemon GO, Niantic, is one of its first partners. Niantic has signed a multi-year agreement with Qualcomm to use the XR2 platform.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
