The Best Virtual Reality Stocks of 2021 (So Far)
Virtual reality is fun! It allows you to experience things in a hyper-realistic way -- placing the wearer of the device to feel like they are actually in the space being projected to them. Many people in the market believe that VR is the future of gaming and that it won't take long before VR supplants PCs and gaming consoles as the main way people play video games.
Though that might still be speculation, for now, VR might also have applications outside of the gaming industry as well. Researchers have found uses for it in psychology, medicine, robotics, as well as the controlling of other technologies like cars, household appliances, and maybe even robots.
Though all of this sounds a bit more in the realm of science fiction, the potential for VR to take over the market and become something really big is very real. As an investor, capitalizing on new and exciting advancements is just part and parcel of what you do. Jumping on this bandwagon before it even starts moving is the best way to maximize your earnings and stay ahead of the competition.
But which VR stocks are the ones with the most potential? Below are the 10 best VR stocks to invest in this year:
1. NVIDIA Corporation (NASDAQ: NVDA)
Market Value: $502.34 Billion
Based in California, this company is a noteworthy technology firm that has been operating since 1993. Though not a direct maker of virtual reality products, much of the hardware they manufacture goes directly into powering VR headsets. Things like general processing units, drivers, and software development kits are made by the firm and are often the source of much development in the industry.
The company's clients come mainly from the video game industry but also cater to other professionals looking to find virtual reality solutions to everyday problems. As such, the company does very well for itself -- enough to make analysts at Goldman Sachs take bullish stances with its stocks.
A testament to NVIDIA's viability as a source of investment is the fact that there are currently 88 hedge funds investing a stake worth roughly $8.6 billion.
2. Alibaba Group Holding Limited (NYSE: BABA)
Market Value: $443.58 Billion
The Chinese company is a massive technologies powerhouse with hands in all kinds of different market sectors. Its interest in VR is driven by a desire to introduce a 3D online shopping experience to its customers -- essentially eliminating the need for physical mall shopping. It is also driven by a desire for VR to one day replace television as to how we consume shows and movies.
Even with regulation problems, the company was given a "buy rating and an estimated future stock price of $300 by HSBC. There are also a whopping 156 hedge funds invested in the company as of the beginning of this year.
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3. Unity Software Inc. (NYSE: U)
Market Value: $33.62 Billion
Based in San Francisco, Unity software builds video games and software. Founded in 2004, the company is leading the way in embracing VR with a separate unit dedicated to software services for virtual reality gear. According to the company, its software is used more than any other platform to power virtual reality games globally, especially in battle-related gaming.
Analysts project long-term growth for the company, both due to the increase in video gaming and because of its commitment to exploiting the potential in the VR market. The company has been given a "buy" rating and the stock is projected to grow to $126.
32 hedge funds are investing a total amount of $11 billion into the company.
4. Lumentum Holdings Inc. (NASDAQ: LITE)
Market Value: $6.40 Billion
Based in San Jose, the main reason this company is expected to do quite well in the growing VR market is due to its prime partnership with China's Huawei Technologies -- which has significant investments in VR. Now as relations between the US and China begin to thaw out, and Huawei resumes operations in the US, mutual growth of Huawei's and Lumentum's stocks is expected.
Analysts have issued a "strong-buy" rating for Lumentum's stocks and there are currently 39 hedge funds investing in the company at roughly $545 million.
5. Alphabet Inc. (NASDAQ: GOOG)
Market Value: $1.82 Trillion
It's no surprise that the parent company of Google is heavily investing in the potential of virtual reality. The multinational tech company intends to use VR for things like Google Lens and Google Maps, as well as a host of other internet-based offerings. They also are looking into using the technology to power virtual tours of museums and tourist destinations from the comfort of your own home.
Stocks for the company have risen by 4% since April and analysts have raised their price expectancy accordingly as well. It is also one of the most popular stocks among hedge funds, representing a stable company that's guaranteed to be profitable for years to come.
157 companies are investing in the company as of the first quarter.
6. QUALCOMM Incorporated (NASDAQ: QCOM)
Market Value: $158.26 Billion
Founded in 1985, the San Diego-based company is a giant in the semiconductor industry. The company provides the chipsets used to power mobile devices -- the very devices that can utilize these chipsets to run software for virtual reality applications. At the start of the second quarter, the firm announced that it was partnering with VictoyXR to bring virtual reality headsets for use in an education program at a local college.
This can be a herald of the future of bigger involvement in the VR industry. In other news, the company also reported revenues of $8 billion in the second quarter, an increase of 52%. There are currently 85 hedge funds tied to the company's stocks.
7. Microsoft Corporation (NASDAQ: MSFT)
Market Value: $2.21 Trillion
Another trillion-dollar company, this Washington-based company is known the world over. Founded in 1975, the company has frequently been at the forefront of cutting-edge technology. They are continuing this tradition with several VR products for video gaming and entertainment. The most interesting of these products is the Microsoft HoloLens, a mixed reality technology that helps businesses incorporate virtual reality into their activities.
258 hedge funds invest in the company with stakes worth $52 billion.
8. Apple Inc. (NASDAQ: AAPL)
Market Value: $2.42 Trillion
Apple has always proven to be an industry leader in new technology and is seemingly not about to let the side down with virtual reality. There are several virtual reality projects in the pipeline. Earlier this year, media reports indicate that Apple was developing a VR headset that would be a precursor to more ambitious virtual reality glasses it eventually plans to produce.
Though there are doubts about how the company's stocks would be able to sustain growth in the long-term, there's no denying the sheer power of the iPhone as it sold amazingly even through the pandemic. At the very least, Apple has incorporated VR-related software that can be used on phones for a variety of applications.
There are currently 146 hedge funds investing heavily in the company's stocks. The largest being Fisher Asset Management with 62.8 million shares worth more than $7.6 billion.
9. Sony Group Corporation (NYSE: SONY)
Market Value: $123.76 Billion
As the leader in the gaming industry with Playstations, this Tokyo-based company is more than ready to embrace the gaming possibilities of VR. In line with this, it was reported that the firm was working on a VR headset that would ship with units of the PlayStation Five to give advanced gaming experiences to customers.
With a "buy" rating given by numerous analysts, a price target of $135, and 28 hedge fund investors as of the first quarter, Sony should definitely be on most investor's radar.
10. Facebook, Inc. (NASDAQ: FB)
Market Value: $1.00 Trillion
The owner and operator of several social networking platforms, Facebook has stakes in the virtual reality sector. It has also set up a virtual reality research lab because the company believes that VR advances can help make social connections better. They eventually plan to introduce VR-based tech into social platforms it operates like Facebook, Instagram, and WhatsApp.
Stock prices increased by 7% in April as the company reported strong quarterly revenues. There are also a whopping 242 hedge funds investing in the trillion-dollar company.
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And those were the best VR stocks to invest in this year. We certainly hope that this article was helpful to you in deciding where to invest your money.
Technological advancements are always met with certain levels of apprehension and even distrust in the market. Not everything new in the market is profitable after all. But at the same time, certain technological advancements might revolutionize our world in ways that we can't imagine. Keeping an open mind is important for an investor to do.
Another important thing is practicing your due diligence with each stock before investing. Research is just another way of minimizing risk and staying on top of your finances. So better research first before making investments.
Both VR and AR have the potential to change the world, but only time will tell how their effects will be felt by us in everyday life. If I had to pick one technology that I think is more promising than the other, it would be AR for sure. The application of mixed reality into our daily lives gives hope for long-term benefits to come with its technological advancements and developments. This might spell a brighter future for humans compared to VR which has entertainment as its main function.
And if you ask me which VR technology is the best, then I'll choose with no doubt, PlayStation VR. It's by far the leader in console-based VR headsets today and it has great support from its parent company Sony as well as third-party developers. And speaking of third parties, the social aspect of PSVR might be a selling point for many parents considering investing on such gaming headset.
But that doesn't mean that there aren't other viable options out there for virtual reality enthusiasts and gamers alike. Vive Pro , Oculus Rift , HoloLens , and Windows Mixed Reality are also good choices when looking for a high quality virtual reality experience. These VR systems will not lose to PSVR in terms of specs or content but they are more than twice as expensive compared to Sony's headset.
One thing that VR investors should bear in mind is though that the industry still has quite a way to go when it comes to making profits from virtual reality. Investors who are just looking for quick cash will probably be disappointed with its slow growth rate. But if you're an investor with vision and patience, then investing at the right time could really spell a lot of good dividends in years to come. And since most VR stocks are listed on NASDAQ or NYSE , they can easily be traded using online brokers such as Ally Invest and TD Ameritrade .
As for me, It's hard to say which VR technology will really take off in the coming years, and it might not even be both AR and VR for that matter. But one thing is certain: they are here to stay. And so far, there already exists many viable options of VR stocks today for investors who want a piece of the virtual reality pie.
As usual, please feel free to leave any comments or questions below. I'd love to hear your feedbacks about this article as well as your ideas on where you think the best place would be to invest in regards to virtual reality. So hit up the comment section below!
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If you proceed with the right information, there's no doubt that your returns will be more than just a simulation.