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The dawn of virtual reality can be traced back to 1956, when visionary cinematographer Morton Heilig planted the seeds of a technological revolution. His groundbreaking invention set the stage for what would become a multi-billion dollar industry, now poised to reshape how we interact with digital worlds.

Virtual reality (VR) is no longer the stuff of science fiction. As we step into 2024, this immersive technology is reshaping industries, revolutionizing entertainment, and opening new frontiers in education, healthcare, and beyond. The VR market represents a golden opportunity to be part of a technological revolution that’s just hitting its stride.

The virtual reality market, valued at nearly $60 billion in 2022, is set for explosive growth. With a projected annual growth rate of 27.5%, the industry is expected to reach a staggering $435 billion by 2030.

Key Takeaways:

• Major tech companies like Meta, Apple, and Microsoft are heavily investing in VR technology, indicating its potential for mainstream adoption.
• VR applications extend beyond gaming, with significant growth in healthcare, education, and enterprise solutions.
• Investing in VR stocks offers exposure to both hardware and software segments of the industry.

What are Virtual Reality Stocks?

Virtual reality (VR) stocks refer to shares in companies that are involved in the development, production, or distribution of virtual reality technologies. These companies may create VR hardware, such as headsets and controllers, or software, such as games and applications. Investing in VR stocks means buying shares in these companies, with the expectation that the VR market will grow and increase the value of these shares. Some examples of companies with VR stocks include Facebook (Meta Platforms Inc.), which owns Oculus, and Sony, which produces the PlayStation VR.

Virtual Reality Market Growth:

The global virtual reality (VR) market is experiencing rapid growth and is expected to reach significant size in the coming years:

• The market size was $25.11 billion in 2023 and is projected to grow to $244.84 billion by 2032, exhibiting a CAGR of 28.6% from 2024-2032. fortunebusinessinsights
• The VR market was valued at $15.75 billion in 2022 and is expected to grow from $19.15 billion in 2023 to $91.54 billion by 2031, at a CAGR of 21.6% from 2024-2031. skyquestt
• Asia Pacific dominated the VR market with a 39.9% share in 2022, driven by technological advancements and government initiatives in Southeast Asia. grandviewresearch

Performance Comparison of Top Virtual Reality Stocks

7 Best Virtual Reality Stocks to Buy in 2024

The companies we have listed are based on hedge fund interest, using data from Insider Monkey’s Q2 2024 report.

1. Meta Platforms Inc. (META)

Number of Hedge Fund Holders (Q2 2024): 225

Meta Platforms, formerly known as Facebook, has positioned itself as a leader in the virtual reality space through its Oculus (now Meta Quest) line of VR headsets and its ambitious metaverse project.

Meta’s Q2 2024 results show strong performance, with revenue reaching $39.07 billion, a 22% year-over-year increase. The company’s Reality Labs segment, focusing on virtual and augmented reality, generated $353 million in revenue, up from $276 million in Q2 2023.

Despite the growth, Reality Labs reported an operating loss of $4.49 billion, wider than the $3.74 billion loss in the same quarter last year. This reflects Meta’s continued investment in VR and AR technologies, including product development and ecosystem expansion.

According to insidermonkey, Citadel Investment Group, led by Ken Griffin, holds a major stake in Meta Platforms Inc. (META). Their position of 12.4 million shares is valued at $6.27 billion.

Meta’s commitment to the metaverse is evident in their financial outlook. The company expects Reality Labs operating losses to increase meaningfully year-over-year, indicating ongoing substantial investments in VR/AR research and development for future growth.

According to Wall Street Analyst on META stock. Of the 68 analysts following the stock, 51 give it a Buy, 8 has it at Hold and one calls it a Sell.

Why We Picked Meta Platforms Inc.:

• Market Leadership: Meta’s Quest series of VR headsets has established the company as a frontrunner in consumer VR hardware.
• Ecosystem Development: Through its metaverse initiatives, Meta is creating a comprehensive VR ecosystem that could drive long-term growth.
• Financial Commitment: Meta’s significant investment in VR/AR technologies demonstrates its commitment to leading the next computing platform.
• User Base Advantage: With billions of users across its social media platforms, Meta has a vast potential audience for VR adoption.
• Content Strategy: The company’s focus on both first-party and third-party VR content creation ensures a steady stream of experiences for users.

2. Nvidia Corp. (NVDA)

Number of Hedge Fund Holders (Q2 2024): 180

While not primarily known as a VR company, Nvidia plays a crucial role in the VR ecosystem by providing the powerful graphics processing units (GPUs) necessary for rendering high-quality VR experiences. Nvidia’s GPUs are essential for both VR content creation and consumption.

NVIDIA reported record Q2 fiscal 2025 revenue of $30.0 billion, up 122% year-over-year. Data Center revenue reached $26.3 billion, a 154% increase from the previous year. Gaming revenue grew to $2.9 billion, up 16% year-over-year.

The company introduced new technologies, including NVIDIA ACE for digital humans and Project G-Assist for real-time gaming assistance. They also announced over 600 RTX games and apps, and surpassed 2,000 games on GeForce NOW.

According to insidermonkey, Citadel Investment Group, led by Ken Griffin, holds a significant position in Nvidia Corp. (NVDA). Their stake of 148,546,600 shares is valued at approximately $18.35 billion.

NVIDIA’s outlook for Q3 fiscal 2025 projects revenue of $32.5 billion. The company returned $15.4 billion to shareholders in the first half of fiscal 2025 and approved an additional $50.0 billion in share repurchase authorization.

According to Wall Street Analyst on NVDA stock. Of the 63 analysts following the stock, 50 give it a Buy and 4 has it at Hold.

Why We Picked Nvidia:

• Technological Necessity: Nvidia’s GPUs are crucial for both VR content creation and consumption, making it an essential player in the VR ecosystem.
• Diversified Revenue Streams: While VR is a growing segment, Nvidia’s strong presence in gaming, data centers, and AI provides stability and multiple growth avenues.
• Innovation Leadership: The company’s continuous advancements in GPU technology directly benefit VR capabilities and performance.
• Developer Support: Nvidia’s VRWorks suite empowers developers to create better VR experiences, fostering growth in the VR content market.
• Potential for Market Expansion: As VR becomes more mainstream, the demand for high-performance GPUs is likely to increase, benefiting Nvidia.

3. Apple Inc. (AAPL)

Number of Hedge Fund Holders (Q2 2024): 187

Apple’s long-awaited entry into the VR/AR market with its Vision Pro headset has generated significant buzz and positioned the company as a potential game-changer in the industry. The Apple Vision Pro, launch in early 2024, combines AR and VR technologies in a high-end “spatial computing” device.

Apple’s Q3 2024 results hint at potential growth in virtual reality initiatives. The Services segment, which could encompass VR-related offerings, saw a notable increase to $24,213 million from $21,213 million year-over-year, suggesting possible expansion in digital experiences.

Research and development expenses rose to $8,006 million, up from $7,442 million in Q3 2023. This increase might reflect investment in cutting-edge technologies like VR. The Wearables, Home and Accessories category, which could include VR hardware, generated $8,097 million in revenue.

According to insidermonkey, Warren Buffett’s Berkshire Hathaway owns 400 million Apple (AAPL) shares, valued at $84.2 billion.

Apple’s strong financial position – with $25,565 million in cash and cash equivalents – provides ample resources to fuel VR innovation. As the tech landscape evolves, Apple seems well-positioned to capitalize on emerging virtual reality opportunities.

According to Wall Street Analyst on AAPL stock. Of the 47 analysts following the stock, 24 give it a Buy, 12 has it at Hold and 1 calls it a Sell.

Why We Picked Apple:

• Disruptive Potential: The Vision Pro represents Apple’s ability to enter and potentially reshape emerging technology markets.
• Ecosystem Integration: Apple’s strong ecosystem could drive rapid adoption and integration of VR/AR technologies among its user base.
• Design and User Experience: Apple’s focus on premium design and seamless user experiences could set new standards in the VR/AR industry.
• Financial Strength: Apple’s robust financial position allows for significant R&D investment in VR/AR technologies.
• Brand Power: Apple’s brand loyalty and marketing prowess could accelerate mainstream adoption of VR/AR technologies.

4. Sony Group Corp. (SONY)

Number of Hedge Fund Holders (Q1 2024): 24

Sony has established itself as a major player in the VR gaming market with its PlayStation VR platform, which is closely integrated with its popular PlayStation console ecosystem.

The PlayStation VR2, launched in February 2023, has received positive reviews for its advanced features and improved user experience. The PlayStation VR2, priced at $549.99, offers high-fidelity visuals, intuitive controls, and a growing library of VR games and experiences.

Sony initially manufactured over two million PSVR2 headsets, anticipating high demand. However, sales fell short of expectations, with only about 600,000 units sold. Faced with a surplus of unsold inventory, Sony has reportedly halted production of the PSVR2.

According to insidermonkey, Fisher Asset Management, led by Ken Fisher, holds a position of 6,816,466 shares in Sony Group Corp. (SONY) valued at approximately $0.58 billion.

Sony’s fiscal fourth-quarter 2023 results show strong performance. The tech giant reported a 35% increase in net income per share, reaching ¥153.60.

Total revenues climbed 14% year-over-year to ¥3,481 billion, with significant contributions from Game & Network Services, Music, Pictures, and Imaging & Sensing Solutions divisions. For the full fiscal year ended March 31, 2024, Sony generated a substantial ¥1,373.2 billion in cash from operating activities.

According to Wall Street Analyst on AAPL stock. Of the 24 analysts following the stock, 18 give it a Buy and 3 has it at Hold.

Why We Picked SONY:

Sony is a compelling choice for VR investment due to:

• Gaming Synergy: Sony’s strong position in the gaming industry provides a natural user base for its VR offerings.
• Content Advantage: With access to a vast library of gaming IPs, Sony can create unique and compelling VR experiences.
• Hardware Expertise: Sony’s experience in consumer electronics translates well to VR hardware development.
• Diversified Business Model: While VR is a growth area, Sony’s diverse business segments provide stability and multiple revenue streams.
• Innovation Track Record: Sony’s history of technological innovation suggests continued advancements in its VR offerings.

5. Microsoft Corp (MSFT)

Number of Hedge Fund Holders (Q1 2024): 296

Microsoft has been making significant strides in the mixed reality space with its HoloLens technology and its broader “mixed reality” ecosystem. Microsoft’s HoloLens 2 is primarily focused on enterprise and industrial applications of mixed reality. The company’s Windows Mixed Reality platform provides a foundation for VR and AR experiences on Windows PCs.

Here is a table comparing the prices of the different HoloLens 2 options:

Microsoft introduced the HoloLens 2 in early 2019. As of mid-2024, the company reaffirmed its commitment to the product, continuing its sales and maintaining its U.S. military contract for the IVAS program. This suggests Microsoft still considers the HoloLens 2 a valuable and relevant offering.

In a 2021 interview, Microsoft CEO Satya Nadella envisioned the potential for technology to construct a “metaverse” that merges virtual and physical realms.

Microsoft’s HoloLens has seen significant growth since its introduction. Initial sales of the first version reached 50,000 units by 2018. By 2020, demand had increased sevenfold, suggesting around 350,000 units sold. A major U.S. Army contract in 2021 added 120,000 more devices. These figures indicate total HoloLens sales of approximately 520,000 units.

According to insidermonkey, The Bill & Melinda Gates Foundation Trust, managed by Michael Larson, holds a position of 36,499,597 shares in Microsoft Corp (MSFT) valued at approximately $15.36 billion.

Microsoft’s Q3 fiscal 2024 results show strong growth across key segments. Cloud services, particularly Azure, drove a 21% increase in Intelligent Cloud revenue. Productivity and Business Processes grew 12%, while More Personal Computing saw 17% growth. Xbox content revenue surged 62%, boosted by the Activision acquisition. The company returned $8.4 billion to shareholders through dividends and buybacks.

According to Wall Street Analyst on MSFT stock. Of the 56 analysts following the stock, 45 give it a Buy and 3 has it at Hold.

Why We Picked MSFT:

Microsoft earns its place in our top VR stocks for these reasons:

• Enterprise Focus: Microsoft’s emphasis on enterprise VR/AR applications taps into a potentially lucrative market.
• Software Ecosystem: The company’s dominant position in enterprise software provides a strong foundation for VR/AR integration.
• Cloud Synergy: Microsoft’s Azure cloud platform can support and enhance VR/AR applications and services.
• Research Capabilities: Significant R&D resources allow Microsoft to push the boundaries of mixed reality technologies.
• Gaming Potential: The acquisition of Activision Blizzard could lead to exciting VR developments in the gaming space.

6. Universal Display Corporation (OLED)

Number of Hedge Fund Holders (Q1 2024): 22

Universal Display Corporation is a key player in the development and commercialization of organic light-emitting diode (OLED) technologies, which are increasingly important for VR displays. While Universal Display Corporation doesn’t produce consumer VR products directly, its OLED technologies are incorporated into various VR headsets, contributing to improved visual experiences.

OLED First Quarter of 2024, the total revenue was $165.3 million as compared to $130.5 million in the first quarter of 2023. Material sales revenue increased significantly, reaching $93.3 million in Q1 2024, up from $70.2 million in the same period of 2023.

Universal Display Corporation CEO Steve Abramson stated: “OLED makes up an estimated 2 per cent of today’s global PC and tablet market, but by 2030 that penetration rate is expected to increase to approximately 20 per cent.”

According to insidermonkey, Point72 Asset Management, led by Steve Cohen, holds a position of 1,074,038 shares in Universal Display Corporation (OLED) valued at approximately 0.18 billion dollars.

Universal Display Corporation’s PHOLED technology may soon revolutionize OLED TVs, with potential rollouts expected by 2025. Currently, UDC’s patented technology is integral to OLED displays in Apple iPhones, produced by both Samsung and LG.

According to Wall Street Analyst on MSFT stock. Of the 12 analysts following the stock, 8 give it a Buy and 4 has it at Hold.

Why We Picked OLED:

Universal Display Corporation is an attractive VR stock pick for the following reasons:

• Critical Technology Provider: OLED technology is increasingly important for VR displays, positioning the company as a key supplier.
• Broad Market Exposure: Beyond VR, OLED technology has applications in smartphones, TVs, and other devices, providing multiple growth avenues.
• Intellectual Property Strength: The company’s extensive patent portfolio in OLED technology provides a competitive advantage.
• Ongoing Innovation: Continuous research in OLED technology could lead to breakthroughs benefiting VR display quality.
• Potential for Market Expansion: As VR adoption grows, demand for high-quality OLED displays is likely to increase.

7. Unity Software Inc (U)

Number of Hedge Fund Holders (Q1 2024): 34

Unity Software is a leading platform for creating and operating interactive, real-time 3D content, including virtual reality experiences. While Unity doesn’t produce consumer VR hardware, its software development kit (SDK) for VR, which is free to download, enables developers to create immersive VR experiences across multiple platforms.

Unity Software Inc (U) first quarter 2024, the company’s total revenue decreased 8% year-over-year to $460 million, largely due to portfolio decisions. However, revenue from the strategic portfolio grew 2% to $426 million.

Within the strategic portfolio, Create Solutions revenue surged 17% to $133 million. Conversely, Grow Solutions revenue declined 4% to $294 million.

According to insidermonkey, Silver Lake Partners, led by Jim Davidson, Dave Roux, and Glenn Hutchins, holds a position of 34,735,404 shares in Unity Software Inc (U) valued at approximately $0.93 billion.

Unity’s solutions are used to create approximately 90% of content on emerging AR platforms like Microsoft HoloLens, and 90% of Samsung Gear VR content.

Unity is described as “dominating the virtual reality business” according to Fortune magazine

According to Wall Street Analyst on MSFT stock. Of the 30 analysts following the stock, 11 give it a Buy, 15 has it at Hold and 3 calls for Sell.

Why We Picked Unity Software:

Unity Software is included in our top VR stocks list for these compelling reasons:

• Development Platform Leadership: Unity’s engine is widely used for VR content creation, making it a crucial player in the VR ecosystem.
• Cross-Platform Capabilities: Unity’s ability to deploy content across multiple VR platforms increases its value to developers.
• Expanding Use Cases: Beyond gaming, Unity is seeing increased adoption in industries like architecture, automotive, and film, broadening its market.
• Subscription-Based Model: Unity’s business model provides recurring revenue, offering stability and predictable growth.
• Potential for AI Integration: The company’s efforts to integrate AI into its platform could lead to more advanced and efficient VR content creation.

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How to Invest in the Virtual Reality Stocks

Identifying Leading VR Companies

Several companies are at the forefront of VR technology. Here are some notable ones:

• Meta Platforms (NASDAQ: META): Known for its Oculus VR headsets, Meta is heavily investing in VR development and the metaverse.
• Sony (NYSE: SONY): Creator of the PlayStation VR, Sony is a significant player in the gaming segment.
• Microsoft (NASDAQ: MSFT): Focused on enterprise applications of VR with its HoloLens technology.
• Apple (NASDAQ: AAPL): Developing VR and AR technologies, including the anticipated Apple Vision Pro.
• Nvidia (NASDAQ: NVDA): Specializes in graphics processing units (GPUs) essential for VR.
• Unity Software (NYSE: U): A leader in 3D image creation software, widely used for VR content development.

Considering VR-Focused ETFs

For a diversified approach, consider Exchange-Traded Funds (ETFs) that focus on VR and related technologies. These funds provide exposure to a range of companies involved in VR:

1. Roundhill Ball Metaverse ETF (METV) – This ETF tracks the Ball Metaverse Index and provides exposure to companies involved in the metaverse, including VR.
2. Global X Metaverse ETF (VR) – This ETF targets the Global X Metaverse Index, offering diverse exposure across industries positioned to benefit from metaverse growth, including VR.
3. Fount Metaverse ETF (MTVR) – MTVR tracks the Fount Metaverse Index, comprising metaverse-related companies. It screens stocks based on size, liquidity, and revenue derived significantly from metaverse-related products or services, including VR.
4. ETFMG Video Game Tech ETF (GAMR) – While not solely focused on VR, this ETF provides exposure to companies involved in the video game industry, which is crucial for metaverse content creation.

These ETFs offer investors a way to gain diversified exposure to companies involved in virtual reality and the broader metaverse theme, which is expected to see significant growth in the coming years.

Conclusion

The virtual reality industry is at an exciting inflection point, with major technological advancements and increasing adoption across various sectors. The seven stocks we’ve explored in this article represent some of the most promising investment opportunities in the VR space for 2024 and beyond.

From hardware manufacturers like Meta and Sony to technology enablers like Nvidia and Universal Display Corporation, and content creation platforms like Unity Software, each of these companies offers a unique value proposition in the VR ecosystem.

FAQs

1. Is it too late to invest in VR stocks?

No, it’s not too late to invest in VR stocks. The VR market is still in its early stages of growth, with many analysts predicting significant expansion in the coming years. However, as with any investment, it’s important to conduct thorough research and consider your risk tolerance before investing.

2. Are there any VR-focused ETFs available for investors?

Yes, there are several ETFs that provide exposure to VR and related technologies. Some examples include the Roundhill Ball Metaverse ETF (META) and the Defiance Digital Revolution ETF (NFTZ). These ETFs offer a diversified approach to investing in the VR and metaverse sectors.

3. How Apple’s entry into the VR market affect other players?

Apple’s entry into the VR market with the Vision Pro could potentially accelerate adoption of VR/AR technologies among consumers and enterprises. While this may increase competition for existing players like Meta and Sony, it could also expand the overall market size, benefiting the entire industry

4. What are some potential risks associated with investing in VR stocks?

Some risks include technological obsolescence, regulatory challenges, competition from new entrants, and the possibility that VR adoption may not meet current growth projections. Additionally, many VR companies are part of larger tech conglomerates, so their stock performance may be influenced by factors beyond their VR initiatives.

5. How can I stay informed about developments in the VR industry?

To stay informed about the VR industry, you can follow tech news websites, attend or watch virtual conferences like CES and GDC, and read reports from market research firms. Additionally, many VR companies provide regular updates on their developments through investor relations websites and earnings calls.