Investors are always looking for the next great area to park their capital, and virtual reality stocks are the perfect opportunity. While virtual reality technology is still in its infancy, it has already begun to make waves in the gaming and entertainment industries. And with the release of affordable VR headsets, it is only a matter of time before virtual reality goes mainstream.
Virtual reality presents an early opportunity for investors to get in on the ground floor of potentially transformational technology. The VR market is highly competitive, and companies must invest significantly to stay ahead of the curve. Moreover, it is still unclear how consumers will ultimately use virtual reality. Investing in VR can be a risky business. However, investing in VR can lead to increased returns for those with higher risk tolerance.
In addition, the innovative metaverse concept is growing fast. The metaverse is a new dimension where people can communicate with others and explore each other’s worlds. The future of our virtual world is unknown, but it has the potential to transform how we live our lives.
As a result, stocks in the virtual reality industry are attracting a lot of attention from investors. The following list is curated with companies with strong growth prospects. It has seen revenues increasing in the last quarter despite a troubling environment and dipping about 10% this year — making them great discount plays too.
Best Virtual Reality Stocks: Microsoft (MSFT)
52-Week High: $349.67
Microsoft (NASDAQ:MSFT) is a tech giant with diverse products and a varied business model. The company has several revenue streams, including product sales, subscriptions, advertising and licensing. Microsoft also offers cloud services, which are becoming increasingly popular. The company has a strong presence in the enterprise market, but it also targets consumers with its Microsoft 365 subscription service. Billions of people worldwide use Microsoft’s products, and the company consistently innovates to stay ahead of the competition.
Microsoft announced that it is expanding into a new sector by planting its roots in the metaverse. With a $68.7 billion purchase of Activision Blizzard (NASDAQ:ATVI) expected to be finalized in June 2023, Microsoft seems to be making its intention obvious about wanting to compete in the VR sector. It already has Hololens 2 and its new mixed reality platform, Microsoft Mesh, makes it easier for people to collaborate.
In its latest quarterly results, Microsoft reported revenues of $51.87 billion, a rise of 12% year over year. Net income rose 2% to $16.74 billion. Microsoft expects to earn between $49.2 billion and $50.2 billion in the fiscal first quarter.
Microsoft is a great investment for several reasons. Firstly, Microsoft is a powerful force in the tech industry, and its varied business model is a major strength. Hence, MSFT is considered a stable and safe investment most times. Secondly, Microsoft has a strong market share in many key areas, such as operating systems and office software. This gives Microsoft a significant competitive advantage, likely to continue. Lastly, Microsoft pays regular dividends to shareholders, providing a steady return on investment.
52-Week High: $182.94
Apple (NASDAQ:AAPL) is an iconic company that has helped shape our world in many ways. And now, the tech giant is turning its attention to virtual reality. Apple is developing a VR headset that it could release by 2023. While some investors are worried that Apple is late to the VR game, others see this as a savvy move that could lead to massive profits. After all, Apple has a proven track record of successfully entering new markets and creating innovative products that consumers love. So although the product may involve some risks, investing in Apple’s VR plans could be wise.
Apple has repeatedly proven itself to be a machine for making money. The company regularly releases new products that consumers go crazy for, driving up stock prices and profits. The tech giant also has a history of repurchasing its stock, which drives up share prices and makes investors happy.
Apple is worth considering if you’re looking for a company you can invest in and not worry about from a financial standpoint. Apple will keep delivering solid returns for investors thanks to its strong financials and dependable track record.
In its latest results, Apple’s revenue grew 2% compared to a 36% growth versus last year and 8% sequentially. The slowing down of growth is a matter of concern, but Apple deserves credit for delivering in a tough market. Across the world, companies are experiencing setbacks because of supply chain problems and inflation . Considering its strong operating model, investors need not worry.
Best Virtual Reality Stocks: Nvidia (NVDA)
52-Week High: $346.47
Nvidia (NASDAQ:NVDA) is a tech company that is best known for its GPUs. Nvidia has not just been successful with video games; it now has a new division specializing in data centers and artificial intelligence.
The company’s GPU market share is considerably higher than competitor Advanced Micro Devices (NASDAQ:AMD), currently at 78%. Nvidia’s GPUs serve multiple segments, including gaming and professional visualization. In recent years, Nvidia has also become a leading player in artificial intelligence and autonomous vehicles.
Nvidia has also developed the Omniverse, a VR ecosystem that includes the metaverse and other VR platforms. The Omniverse allows users to share and collaborate on virtual worlds. Nvidia’s VR products are some of the most advanced and innovative on the market, and the company is poised to take advantage of the growing popularity of VR technology.
Nvidia has seen rapid growth in recent years, with its revenue increasing from $4.68 billion in 2015 to $26 billion in fiscal 2021. This growth has been driven by strong demand for Nvidia’s GPUs. At the same time, Nvidia has been delivering great profitability, earnings and share price growth over the last five years; 350% in five years is amazing. Hence, if you are looking for a solid investment among virtual reality stocks, NVDA ticks all the boxes.
52-Week High: $37.60
Matterport (NASDAQ:MTTR) is a VR company that you should check out if you’re interested in investing in the virtual reality industry.
The company specializes in capturing and processing spatial data. Matterport’s technology allows users to create three-dimensional models of real-world environments. These virtual models can be used for many purposes, including VR, architecture design and construction planning.
Matterport’s technology is based on laser scanning, which captures detailed information about the shape and appearance of an environment. Its algorithms then process this data to create a realistic 3D model. You can use Matterport’s technology to create indoor and outdoor models.
In addition to providing spatial data, Matterport’s models can also be used to generate other data, such as floor plans, measurements and even photo-realistic images. Matterport’s technology is revolutionizing how people interact with and understand the world around them.
The VR company announced a 70% jump in total subscribers in Q1 versus the year-ago period. It surpassed Wall Street’s consensus estimates and guidance for revenue and earnings.
Matterport is also in a good position for future growth because it has no debt and has $600 million in cash and investments on its books. The company will report earnings after the market closes on Aug. 10.
Best Virtual Reality Stocks: Roblox (RBLX)
52-Week High: $141.60
Roblox (NYSE:RBLX) has a huge fan following amongst America’s youth. Research shows that Roblox has 54.1 million active players every single day. One study reveals that over half of all kids in America play Roblox, making it one of the leading video game companies nowadays.
Roblox is an ever-growing video game platform that lets users create their virtual worlds and play in them. It’s free, but developers have access to a wide array of tools to build games easily — from design through development.
Microsoft’s Minecraft franchise is its biggest competitor. However, for now, Roblox is outpacing the competition healthily. It is translating into excellent numbers for the gaming company. Roblox is raking in the cash as its revenues grow by leaps and bounds. The company reported a 108% increase from last year to $1.9 billion, with first-quarter 2022 numbers showing a 39% jump.
Undoubtedly, Roblox did very well during the Covid-19 pandemic. As children and their parents sheltered in their homes, usage skyrocketed. However, the latest numbers confirm Roblox is not done growing.
Unity Software (U)
52-Week High: $210
Unity Software (NYSE:U) is best known for its Unity Engine, a powerful tool used by game developers to create immersive 3D experiences. However, Unity is also becoming increasingly popular in virtual reality, with many developers using it to create innovative new VR games and experiences. In addition to its technical capabilities, Unity has another key advantage for VR developers: its ability to build communities with user-generated content.
Unity’s Asset Store is a marketplace where developers can buy and sell VR assets, and its monthly Unite conferences bring together VR professionals from all over the world. As VR becomes more mainstream, Unity is poised to play a key role in its development. Thanks to its user-friendly tools and strong community support, Unity is helping to make VR accessible to everyone.
Unity Software has also teamed up with professional designers to create new ways of interacting in digital environments. This includes the popular title Pokémon Go.
Revenues for the first quarter reached an impressive $320.1 million, increasing 36% year over year. These are still early days for the company. But usage is growing at a healthy pace. That shows people are willing to adopt its technology to create smarter, more personalized content for an engaged audience. Its loss from operations came in at $171.2 million, or 53% of revenue, compared to the figure for last year when it stood at 47%. Hence, it has a growth stock written all over it.
Best Virtual Reality Stocks: Meta Platforms (META)
52-Week High: $384.33
One of the most well-known companies in the VR market is Meta (NASDAQ:META). Previously operating as Facebook, the company is investing billions in the metaverse space. It has already unveiled its metaverse, where people can interact through computer-generated avatars. Facebook’s investment in the metaverse will allow it to become a major player in this new and exciting industry.
It is important to remember that the company has a long history of creating VR products. The corporate rebranding underlines the importance of the metaverse and VR concepts. However, the tech giant’s relationship with VR goes back years. In 2014, it acquired Oculus VR in a $2 billion deal, and the purchase has paid off tremendously. Meta’s Oculus Quest virtual reality headset was the best-selling of 2021 and is a leader in bringing VR to the masses.
The Oculus Quest is a standalone VR headset. You don’t need a PC or phone to use it; it also tracks your movement so you can move freely without running into anything.
On the downside, Meta Platforms is on the receiving end of regular regulatory action. It is a part of Big Tech, which makes it vulnerable to government scrutiny — but it’s an inherent consequence of being such a large enterprise. The pros, therefore, outweigh the cons.
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.