The global virtual reality market is expected to expand at a compound annual growth rate of 27.5% from 2023 to 2030, according to a report from Grand View Research.
With a total market value of $59.9 billion in 2022 — more than double its value in 2021 — overall revenue in the sector is forecast to reach over $435 billion by 2030, the report noted.
[Sign up for stock news with our Invested newsletter.]
For investors who want to get in on a budding industry, these five companies are some of the best VR stocks to watch right now:
| Stock | Year-to-date return as of March 14 |
| Nvidia Corp. (ticker: NVDA) | 77.6% |
| Meta Platforms Inc. (META) | 39.1% |
| Advanced Micro Devices Inc. (AMD) | 26.9% |
| Apple Inc. (AAPL) | -10% |
| Sony Group Corp. (SONY) | -8% |
Nvidia Corp. (NVDA)
“Philosophically, whether we are talking about AI or virtual reality, we believe that the best play when it comes to these developing and nascent technologies is to adopt the ‘pick-and-shovels’ approach,” says Daniel Milan, investment advisor representative and managing partner at Cornerstone Financial Services in Southfield, Michigan. “What we mean by that is the most opportunistic approach is to not invest in the gold miners themselves but instead in the companies that sell the picks, shovels and tents necessary to mine or find the gold.”
The gold in question here is semiconductors and chips, and as a leading designer of graphics processing units, or GPUs, for gaming consoles and PCs, Nvidia is one heck of a pick-and-shovel company.
“Nvidia has specific virtual reality GPUs that are best in the business, and even software developer kits to deliver the best performance (and) images,” Milan says. “No one delivers a higher quality ‘pick and shovel’ than Nvidia, and thus they are poised to significantly benefit from this technology transition.”
Meta Platforms Inc. (META)
While not a strictly-VR company, any discussion of virtual reality must include Meta Platforms, the parent company of Facebook and Instagram. The fact that Meta has its fingers in many pies makes it a top VR stock, according to Steven Conners, founder and president of Conners Wealth Management in Scottsdale, Arizona.
“Until the market becomes more defined, larger companies in this space might make more sense for investors,” he says. Larger companies like Meta can afford to invest in VR without risking the overall business.
In its 2023 full results release, the company said it plans to continue developing augmented and virtual reality products despite the fact that this will likely result in increasing operating losses for its Reality Labs division throughout 2024.
As a leader in VR platforms, Meta has already built a sizable lead in both bringing VR to the masses and monetizing it. It also happens to be the largest holding in the Morningstar Global Metaverse & Virtual Interaction Select index, which is designed to provide pure exposure to the metaverse and virtual interaction theme. Of course, this doesn’t discount the many regulatory headwinds that Meta and the rest of Big Tech are facing.
Advanced Micro Devices Inc. (AMD)
Alongside Nvidia, AMD is one of the most recognized semiconductor companies. The company “is well positioned to prosper from favorable trends in data centers, artificial intelligence and gaming,” writes Morningstar equity strategist Brian Colello, who covers the stock and considers it and Nvidia to be the two “notable firms in graphics processing units, which are especially well suited for AI.”
The company is focusing on AI in three key areas: hardware and software solutions for AI, innovating with partners across an open ecosystem, and creating compelling user experiences.
Colello thinks AMD’s GPUs suited for AI workloads should be in high demand over the next few years. While Nvidia will likely capture the largest market share, “we think that all AI vendors and customers will seek alternatives to keep Nvidia’s dominance at bay, and AMD might be the best positioned company to emerge as a second source in AI,” he writes.
[See: Artificial Intelligence Stocks: The 10 Best AI Companies.]
Apple Inc. (AAPL)
Another big player in the VR space that Conners likes is Apple. In June 2023, 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 will make it hard to compete with Meta’s Quest 3 headset, which starts at $500 per unit. But it does “provide some insight as to how much the public will spend on this new area,” Conners says.
Apple believes it can compete at this price point by using “much higher-quality components while prioritizing user privacy,” according to Apple Insider. Only time will tell if the market agrees.
Regardless, the Vision Pro “will be a tiny fraction of their overall sales and profits,” Conners says, so even if the headset never takes off, your investment in AAPL still can. And since the stock is a bit beaten down so far this year, now could be a good time to buy.
Sony Group Corp. (SONY)
Sony entered the VR space with its first virtual reality headset, the PlayStation VR, back in 2016. It went on to sell 5 million units by 2020, and in 2023, the company released the updated VR2.
Priced at just under $600, the VR2 is a touch more expensive than the Meta Quest 3, but well under Meta Quest Pro ($888) and way below the Apple Vision Pro’s price. The PlayStation VR2 — alongside Meta and Apple’s offerings — is among the top picks for VR headsets to buy in 2024, according to PCMag.
Kazunori Ito, director of Japan and technology research for Morningstar, believes Sony’s VR service “could deliver additional users to the PlayStation ecosystem.”
Some bullish viewers go so far as to say the VR2 may be a breakthrough mode of entertainment for all types of media — including movies, music and sports — and not just video games.
More from U.S. News
6 Best Biotech Stocks to Buy for 2024
6 Best 5G Stocks to Buy in 2024
How Much Would $10,000 Invested in Nvidia Stock 20 Years Ago Be Worth Today?
5 Best Virtual Reality Stocks to Buy originally appeared on usnews.com
Update 03/15/24: This story was previously published at an earlier date and has been updated with new information.
