Game stocks are among the fastest growing engines in the technology sector. Facebook (NASDAQ:FB) made headlines recently when it acquired BigBox VR, creators of the Battle Royale virtual reality title Population: one. It is an ideal time to launch into virtual reality actions, a critical category of gaming space.
With cable defines virtual reality as “technology by which computer-assisted stimuli create the immersive illusion of being elsewhere.” This immersive illusion is manifested in VR headphones. These devices have become a major engine of growth in the gaming industry. And that only scratches the surface of the true potential that lies with virtual reality. Virtual reality technology is impacting several sectors, including healthcare, education and engineering.
But what is the opportunity? In accordance with Statistician, the global VR market is expected to grow by less than $ 5 billion by 2021 a more than $ 12 billion in 2024. And between 2021 and 2028, Grand View Research projects the composite annual growth rate (CAGR) of the virtual reality industry to be 18%.
Like another group of hot stocks, those of electric vehicles, there are many different ways to invest in virtual reality stocks. In this article, I will give you some of my selections along with a brief explanation of why they deserve your consideration.
Without further ado, here are my seven virtual reality values to buy or keep on your watchlist:
- Nvidia (NASDAQ:NVDA)
- Qualcomm (NASDAQ:QCOM)
- Microsoft (NASDAQ:MSFT)
- apple (NASDAQ:AAPL)
- Lumentum Holdings (NASDAQ:LITE)
- Snap (NYSE:SNAP)
- Unity software (NYSE:U)
Virtual Reality Actions: Nvidia (NVDA)
The first stock on my virtual reality stock list is Nvidia. The company’s products are aimed at professionals, gamers and developers from almost every corner of the virtual reality industry. Nvidia is currently building some of the fastest graphics processing units (GPUs) for virtual reality. And the company recently released its VRWorks software development kit, which provides developers with the tools to enhance the virtual reality experiences they create.
As part of the red-hot semiconductor industry, an investment in NVDA stocks provides you with several apple bites. NVDA has increased by more than 50% in the year and more than 115% in the last 12 months. However, stocks show no signs of cooling. Growth-oriented investors can be confident knowing that 11 analysts have given Nvidia a target price update since the company reported its latest gains. Of the 32 analysts covering the company, 28 have the shares classified as “buy-in” with a “strong buy-in”.
Qualcomm makes this list for a couple of reasons. First, the company’s relationship with Apple gives it a firm foothold in 5G construction. The expansion of 5G technology is critical to the continued growth of virtual reality applications.
However, Qualcomm helps supply the virtual reality sector directly through its Extended Reality (XR) platform. The platform enhances mixed reality (MR) environments, which combine virtual reality and augmented reality. Qualcomm provides reference designs based on the Snapdragon chip to allow OEMs to design and manufacture their own headphones.
And one of the company’s partners for Snapdragon XR2 is Facebook, which can provide Qualcomm with a competitive advantage as both companies try to expand their reach in this growing market.
Although QCOM shares have fallen 9% during the year, recent analyst price targets suggest the sale has been surpassed. Of the 28 analysts covering Qualcomm, 16 give the stock a buy rating and one gives it a “strong buy” rating.
Virtual Reality Actions: Microsoft (MSFT)
Microsoft has long since given up its reputation as a computer company. It is clear that the company is making an aggressive push into the world of virtual reality. Microsoft currently has several devices and games that allow consumers to immerse themselves in a world of mixed reality. In addition, the company is interacting with the developer community, which will be critical to gaining market share.
Microsoft has continually shown that once it puts its considerable weight behind an initiative, it is likely to succeed. This is one of the reasons to buy shares of MSFT. Still, the story gets better. The company has already made major forays into virtual reality with commercial and military customers. In fact, Microsoft signed a $ 480 million contract with the U.S. military in 2018 to develop headphones that would prepare soldiers for real-world combat situations.
The launch by the company of HoloLens 2 headphones is priced at $ 3,500 which puts it out of the reach of the casual consumer. The corporate market, however, has provided a home for the device.
If you’re looking for virtual reality actions that are in a position to get ready with Facebook, Apple is a good place to start. The two companies have been in a public dispute over user privacy. Apple has continued with its intention to allow iOS users to disable data tracking apps.
But virtual reality is another field where Apple is also starting to flex its muscle. The company is expected to launch its own AR / VR headphones in 2022. The follow-up will be done with a pair of lighter AR glasses in 2025.
For several years, the increase in revenue in its Portable Services and Industries, Home and Accessories areas has been a key driver of AAPL’s share price growth. A new virtual reality product would be another way for Apple to expand its revenue base beyond its many signature devices. It would also be a definitive statement from Apple that it wants to be a player in the AR / VR ecosystem, which may be part of a larger strategy to launch a standalone vehicle.
Virtual reality actions: Lumentum Fund (LITE)
Lumentum could be considered one of the founding fathers of virtual reality. The company manufactures optical and photonic products that are essential for the higher bandwidth requirements of the 5G launch.
In recent years, the company has made a pivot. Instead of simply building transceivers, it became a company that supplies the parts needed to make transceivers. This places the company in a market category with less competition.
As for virtual reality actions, LITE actions are retarding. But this can present investors with a buying opportunity. This is due to the fact that one of the areas in which Lumentum focuses is the lidar segment of 3D detection, which will be essential to make autonomous vehicles a reality.
Analysts currently have a consensus price target that gives LITE shares a rise of almost 17%. And of the 16 analysts covering the shares, it has 10 buy ratings and one “strong buy” rating.
Snap is perhaps best known for being the parent company of Snapchat, the social networking app that was one of the first to show virtual reality and augmented reality. Users loved the ability to enhance their selfies in a fun and shareable way. This ability to share their edited photos gave consumers a reason to collaborate with technology on a daily basis.
Technology also helps Snap, as they say, skate as far as the puck moves. The Covid-19 pandemic revealed many inefficiencies in the consumer experience. The Snapchat app fixes some of these by allowing users to perform virtual previews of products ranging from shoes to nail polish.
But what started out as ubiquitous filters is becoming big business. According to reports, Snap is adding RA features to its Spectacles glasses and has added RA features to its in-app advertising.
SNAP shares have had a bumpy pace, but still produced a 33% increase in 2021. The company has posted years of consecutive quarters of accelerate double-digit revenue growth. And analysts expect the company to continue that trend when the company reports gains in July.
Virtual Reality Actions: Unity Software (U)
The last of my virtual reality values is Unity Software. Unity products do not face consumers. However, they play a key role in meeting the needs of the developer community. Specifically, Unity provides a real-time development platform for gaming on desktop, mobile, and console platforms.
Unity now offers development tools that will support virtual reality applications. Developers are rapidly migrating from linear 2D to real-time 3D in content creation. Virtual reality will play an important role.
In a 2020 survey, 96% of developers responded that they would maintain or increase their subscriptions. And approximately 62.5% said ease of use was the main reason for loyalty to the Unity platform. And Unity Software finds other applications for its software in sectors such as real estate, healthcare and energy.
Investors may be acidic in U shares depending on the company’s quarterly loss of $ 110.9 million. The loss is largely explained by nearly double R&D spending. However, the company’s revenue increases, as does the proportion of customers who spend more than $ 100,000.
On the date of publication, Chris Markoch it had (neither directly nor indirectly) any position in the values mentioned in this article. The views expressed in this article are those of the writer, subject to InvestorPlace.com Publication guidelines.
Chris Markoch is a freelance financial writer who has been covering the market for seven years. He has been writing for Investor Place since 2019.