The global virtual reality market is expected to expand at a compound annual growth rate, or CAGR, of 15% from 2022 to 2030, according to Grand View Research.
With a total market value of $21.8 billion in 2021, overall revenue in the sector is forecast to reach $87 billion by 2030. Beyond gaming and entertainment, the technology’s applications “in instructional training, such as for teaching engineers, mechanics, pilots, field workers, defense warriors and technicians in the manufacturing and oil and gas sectors, is propelling the market growth,” according to Grand View Research’s analysis. VR is even being used by event planners.
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For investors who want to get in on a budding industry, these seven companies are some of the best VR stocks to watch right now:
| Stocks | Year-to-date gains |
| Meta Platforms Inc. (ticker: META) | 134.2% |
| Qualcomm Inc. (QCOM) | 13.9% |
| Apple Inc. (AAPL) | 43.6% |
| Microsoft Corp. (MSFT) | 45.8% |
| Matterport Inc. (MTTR) | 15.4% |
| Sony Group Corp. (SONY) | 30.7% |
| Unity Software Inc. (U) | 45.8% |
Meta Platforms Inc. (META)
Any discussion of VR should start with Meta Platforms, formerly known as Facebook. In the company’s fourth quarter 2022 earnings presentation, CEO Mark Zuckerberg reported that the company’s priorities remain with AI and the metaverse
, calling these the “two major technical waves driving our roadmap” today and over the longer term. While Meta spent more time talking about artificial intelligence than the metaverse in its Q1 2023 earnings report, it continues to spend on virtual reality and posted a nearly $4 billion operating loss in the first quarter, up from nearly $3 billion in Q1 2022.
Zuckerberg pointed out that while most of the company’s investment is going toward developing computing platforms like glasses, headsets and software, “most people are going to experience the metaverse for the first time on phones and start building up their digital identities across our apps.” As a leader in VR platforms, Meta has already built a sizable lead in both bringing VR to the masses and monetizing it. Of course, this doesn’t discount the many regulatory headwinds that Meta, along with the rest of Big Tech, are facing. Also worth mentioning is Facebook’s declining user base, which could hurt the advertising revenue Meta needs to reinvest into VR.
Qualcomm Inc. (QCOM)
If Zuckerberg is right that most people will experience the metaverse through their phones first, Qualcomm is another virtual reality stock to watch because of its focus on smartphones. Qualcomm’s Snapdragon processor chips are used in Android and Windows smartphones, laptops, tablets and smartwatches. It’s even used in Meta’s Oculus Quest 2. If you think the future of VR is more mobile than PC, QCOM may be the stock pick for you and now may be the time to buy, given shares are more or less sideways in the past 12 months.
Apple Inc. (AAPL)
In early June, Apple unveiled the Vision Pro, an augmented reality headset and Apple’s first new product category since the Apple Watch was released nine years ago. The headset, which looks like a pair of ski goggles, is being called a “spatial computer” in that it allows users to overlay virtual images, videos and applications over surfaces in the real world. Eye and hand tracking allow the wearer to interact with what they see — for instance, pinching the air can zoom in or out of a photo. One of the biggest question marks around the launch of the Vision Pro is the price tag: $3,499. That price point will make it hard to compete with Meta’s Quest 2 headset, which runs between $299 to $499 per unit.
Apple believes it can compete at this price point by using “much higher-quality components while prioritizing user privacy,” according to Apple Insider. If the market agrees, only time will tell. However, Apple has continuously charged more for its MacBooks and iPhones than its competitors charge for comparable products, and it appears to be banking on the same brand recognition and customer loyalty for its VR headsets. And, according to reports, Apple is working on a cheaper version of the Vision Pro, similar to its lower-cost versions of the iPhone Pro and MacBook Pro.
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Microsoft Corp. (MSFT)
Microsoft made a name for itself back in the 1990s with its Windows operating system. But more recently, with its $68.7 billion bid to purchase Activision Blizzard Inc. (ATVI
), the company has revealed its intention to compete in the metaverse, and hence the world of VR. Activision isn’t yet considered a major player in the metaverse, but it’s a gaming company already making inroads into the VR market and Microsoft has framed the pending acquisition as a metaverse play. While the fate of the Activision deal is uncertain after a U.S. judge temporarily granted the Federal Trade Commission’s request to block the acquisition in June, Microsoft has also dipped its toes into the VR world with the HoloLens 2 augmented reality headset. If allowed to proceed, the Activision deal could help push that technology even further ahead of competitors. The company reported record earnings in 2022 with $198 billion in revenue and $83 billion in operating income, while its Microsoft Cloud surpassed $100 billion in annualized revenue for the first time.
Nvidia Corp. (NVDA)
Nvidia’s graphics processing units, or GPUs, deliver the kind of high-quality graphics that could make VR extremely compelling. That’s because the GPUs that Nvidia creates could be precisely what will drive VR’s reality-based graphics simulations. The company’s GPUs currently account for around 80% of market share. This is considerably more than competitor Advanced Micro Devices Inc. (AMD), which holds a mere 20% of market share. NVDA stock is up nearly 200% year to date, as of June 15, and that’s after a roughly 42% loss in 2022. Of course, there are many other reasons to own NVDA, including its involvement in cutting-edge industries such as artificial intelligence and autonomous vehicles. Investors can simply add VR to NVDA’s already compelling investment case.
Matterport Inc. (MTTR)
With a less than $1 billion market cap, spatial data firm Matterport is by far the smallest company covered on this list. However, what Matterport lacks in size, it makes up for in potential. The stock only recently went public by merging with a special-purpose acquisition company, or SPAC, in July 2021. But it has seen impressive revenue growth since then, and it reported record subscription revenue at $19.8 million and a 33% increase in total revenue year over year in the first quarter of 2023. Matterport designs digital twins, which means it uses 3D cameras and other technology to reproduce replicas of the physical world in virtual worlds. In the years to come, this tech could become a big part of the metaverse and virtual reality in general.
Sony Group Corp. (SONY)
In June 2022, Sony CEO Kenichiro Yoshida called the metaverse “an area of great potential and opportunity” for the company that he intends to engage in “as a new growth area alongside mobility.” Yoshida says Sony will approach the metaverse through entertainment, such as live concerts in the gaming space and the company’s partnership with Manchester City Football Club to create a virtual stadium. Sony’s PS VR and PS VR 2 headsets gives users a 360-degree view and 3D audio to help pinpoint where sounds are coming from and how far away they are. SONY stock has steadily climbed in 2023, gaining more than 25% year to date, with little signs of slowing down.
Unity Software Inc. (U)
Unity Software calls itself “the world’s leading platform for creating and operating interactive, real-time 3D (RT3D) content” and was recently named one of the world’s most innovative companies by Fast Company. To live up to this reputation, it’s creating VR games that let players compete in real time. The company is building the metaverse’s architecture with the help of professional designers. This includes a new series of talks and workshops to inspire creators as well as many already successful titles, including augmented reality game Pokemon Go. U shares soared 26% in a single day on June 5 — its best day since its IPO — after Apple said it is working with the developer on games and apps for the VisionOS platform. That upward trajectory broke the stock out of a major resistance level, bringing it to a price point it hasn’t seen since September 2022.
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7 Best Virtual Reality Stocks to Watch originally appeared on usnews.com
Update 06/16/23: This story was previously published at an earlier date and has been updated with new information.
