Virtual Reality, or VR, is a technology that immerses the user into a computer-generated simulation of an environment. It is most often used in video games and movies. But you can also use it for other things such as training simulations and educational experiences. Virtual reality is not just an interesting technological niche. VR will be a major part of the future economy, and investors should keep up with this trend through VR stocks.
VR has been around since the 1960s when Ivan Sutherland developed what he called “The Sword of Damocles,” which was a head-mounted display that could show computer graphics on a screen. However, it wasn’t until the 1990s that VR became popular again with new hardware and software development.
The investment in virtual reality has been significant over the past few years. According to Statista data, the global VR market will swell from under $5 billion in 2021 to over $12 billion in 2024. The enterprise and consumer segments of VR gaming will benefit immensely from this growth.
Virtual reality has been around for a while. But companies have only recently started investing in it. The stock market is beginning to take notice of the revolutionary possibilities of VR. And it could be one of the most interesting technologies to follow in the coming years. In analyzing the overall sector, you will see several startups and experienced companies in the mix. Therefore, if you want to pick up stocks from a well-balanced portfolio, a healthy combination would best serve your interests.
Here’s five good VR stocks to start with:
- Meta (NASDAQ:FB)
- Qualcomm (NASDAQ:QCOM)
- Nvidia (NASDAQ:NVDA)
- Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG)
- Apple (NASDAQ:AAPL)
VR Stocks: Meta (FB)
Last year, Facebook’s CEO, Mark Zuckerberg, changed the company name to “Meta.” The shift focuses on making the “metaverse” a reality.
Facebook has previously introduced two beta projects. The first, Horizon World, is a virtual world that lets users invite friends to enjoy fun activities. Horizon Workrooms does the same thing but in business environments.
It’s pretty amazing to think that the metaverse could have a billion users in just ten years. Thanks to the rise of easily accessible VR technology, this would be possible.
VR is likely to take over major recreation and business activities in the coming decades. A world where people can immerse themselves in virtual reality seems like it would be great. With the use of augmented reality (AR), they’d be able to interact with others in a 3D environment. This new world is based on web technologies and will be open to any developer who wants to create content.
This means endless opportunities for people who want to create virtual worlds or games or hang out with friends in a virtual environment.
Meta’s VR lynchpin is a virtual reality headset developed by a company called Oculus VR. Facebook acquired it in 2014 for $2 billion. The latest version of the headset, called Oculus Quest 2, is available at $299. That makes it the cheapest headset available on the market at the moment.
Qualcomm is a multinational company that produces semiconductor chips and other electronics.
Dr. Irwin Jacobs, Dr. Andrew Viterbi, and Dr. Franklin Antonio established Qualcomm as a private company in 1985 to develop digital wireless data communication products to meet the needs of the personal computer revolution of the 1980s and has since grown to become one of the world’s largest suppliers of integrated circuits (ICs) for mobile phones, tablets, and automobiles.
A good way to prepare for the future is by purchasing stocks for companies that operate within a technology-related field. You can even invest in semiconductor companies that provide processors for VR-related devices. Qualcomm is a company that plays a much more disruptive role by providing chips to power the latest technologies in any given field. Hence, they are a key player if you want to invest in high-end VR products and content, as they offer one of the best value propositions on the market.
Qualcomm’s newest new chips are perfect for extended reality — they’re compatible with 5G, which means you can hardwire their experiences into the internet of things, artificial intelligence, and virtual/augmented reality. You can’t even begin to imagine what users will be able to do with these!
Therefore, QCOM is a pick-and-shovel play that is one of the best VR stocks out there.
VR Stocks: Nvidia (NVDA)
Nvidia is a company that specializes in creating graphics processing units or GPUs. They are one of the top companies in the game industry.
Nvidia has been one of the pioneers in creating VR headsets and virtual experiences. Their GPUs, used for rendering graphics on their VR headsets, are the most powerful graphics processors available today. Nvidia’s GPU architecture is called Turing and helps meet the needs of both computer games and VR experiences. Nvidia is considered the best option on the market for top-notch GPUs, with its Turing & GeForce RTX lines being must-have high-end components of any VR setup.
It has developed a suite of tools called VRWorks, which many VR developers have used worldwide.
Nvidia’s VRWorks suite is a set of software that uses Nvidia’s GPU to provide immersive experiences to users. VRWorks includes a set of libraries, application programming interfaces (APIs), and feature sets that developers can use for VR development on PC and mobile devices.
Manufacturers and investors are already turning up their attention on the metaverse. Companies are investing in VR to save them a lot of money. Nvidia CEO Jensen Huang believes the company’s VR initiative will greatly reduce costs for companies and make everyday living more enjoyable. “It is a 3D extension of the internet that is going to be much, much bigger than the 3D physical world that we enjoy today,” he said when speaking with Yahoo Finance Live.
Nvidia, which makes chips that power computing devices, will benefit from this shift.
Alphabet (GOOG, GOOGL)
Google is one of the pioneers of virtual reality and augmented reality. They have been working on this technology for years now, and their newest project, Google Lens, is a prime example of how they are taking this technology to the next level.
The Google Glass was one of their first products that had a huge impact on society. It was a wearable device that allowed people to access their surroundings through voice commands and displayed information on the glasses’ lenses.
Unfortunately, it failed to live up to expectations and had many privacy concerns. Therefore, it marked a rare misstep for the tech giant. However, that has not perturbed it from trying new things.
An excellent example is Google Lens. It is an intelligent object recognition system that can identify objects, scenes, and text. It can also provide information about the object or text it recognizes. Meanwhile, virtual reality YouTube creators produce immersive videos that you can view on a VR headset. These videos are created by stitching together multiple 360-degree video clips to create a seamless experience. You can watch these videos using a VR headset or computer screen.
Finally, Google Earth VR is a virtual reality software package that allows users to explore the world from a 360-degree view. It is a free service accessed by downloading the Google Earth app. Users can also access it through their Oculus Rift or HTC Vive headsets.
Moving forward, the tech giant will continue to build on this already impressive VR product suite, making it one of the best stocks in this segment.
VR Stocks: Apple (AAPL)
Apple is one of the most valuable publicly traded companies globally, with over $3 trillion market capitalization. Apple’s revolutionary products have made it one of the most iconic brands in history; it is the most valuable brand in the world by 2021, valued at $263 billion.
Apple’s flagship product is its iPhone, which was introduced in 2007. Since then, it has introduced many other revolutionary products that have made Apple an amazing investment for many people worldwide — from individuals to large institutional investors like pension funds and hedge funds.
Apple’s success is attributable to its innovation and creativity. Additionally, they have maintained a competitive advantage through their strong brand name and customer loyalty. But the company, strangely, doesn’t have a large presence in the VR space.
However, considering the market opportunity, that will not remain the case for long. Apple is the company that has the most potential to dominate in the AR and VR market. They have a lot of resources, such as money and talent, which will allow them to create a headset that will be compatible with both AR and VR.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.