Virtual reality offers investors a huge opportunity. Not only is this market expected to grow from around $117 billion currently to $227.7 billion by 2029, but most major VR stocks are also incredibly oversold.
Better still, virtual reality stocks are only gaining popularity in several industries including healthcare, gaming, entertainment, real estate, retail, education, and more. The technology is even being used to train staff members and healthcare professionals. We attend VR conferences online in real time. And more and more companies want to improve shopping experiences with virtual reality, with e-commerce giants increasingly turning to virtual reality to do just that.
According to attorney Peter J. Lamont, “Companies can use virtual reality for collaboration. For example, you could have a meeting with employees in different locations by having them all put on VR headsets. This would allow employees to communicate and collaborate more effectively than they could through traditional video conferencing.”
In short, we see a huge opportunity moving forward.
With that in mind, investors may want to keep an eye out for these seven virtual reality stocks that I currently see as top opportunities.
|TOWARDS||ProShares Metaverse ETFs||$29.62|
ProShares Metaverse ETF (VERS)
One of the best ways to diversify your portfolio inexpensively is to use an exchange-traded fund (ETF). In the world of virtual reality, one of the main ETFs of this type is the ProShares Metaverse ETFs (NYSE: TOWARDS).
With this ETF, investors can gain exposure to virtual and augmented reality opportunities, with stocks such as Lumentum Fund (NASDAQ:LIGHT), Advanced micro-systems (NASDAQ:AMD), Immersion society. (NASDAQ:IRMM), Vuzix Corp. (NASDAQ:VUZI), Qualcomm (NASDAQ:COMQ), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT) to only cite a few. With a current price of around $30, investors are exposed to all of these stocks. Currently, the VERS ETF has an expense ratio of 0.58%. That’s a bit above the average ETF expense ratio, but it’s still a reasonable price to pay for the diversification this ETF offers.
By now, most investors have heard of the Metaverse. At present, Roblox (NYSE:RBLX) is the closest thing to a mainstream social metaverse, with a mission to create a platform for human co-experience that allows billions of users to come together to play, learn, communicate, explore and develop their friendships.
The company’s stock price is also starting to climb, after reporting that daily active users stood at 57.8 million in the last quarter, up 23% year-on-year. ‘other. Committed hours jumped to 4 billion, up 16% year-on-year. Even better, estimated bookings were between $212 million and $219 million, up 11-15% year over year.
Microsoft works with Metaplatforms (NASDAQ:META) to change the way people can work and play in a virtual reality environment. This collaboration will involve Microsoft’s services, including Teams, Office, and Xbox Cloud Gaming, coming to Meta’s Quest VR headsets.
“We’re bringing an immersive Microsoft Teams meeting experience to Meta Quest to give people new ways to connect with each other,” CEO Satya Nadella said as quoted by TheVerge.com. “You can connect, share, collaborate as if you were together in person.”
Ahead of the company’s earnings on Oct. 25, Citi analyst Tyler Radke expressed concern that Microsoft will release weak numbers. However, he still has a buy rating on the stock, with a price target of $282. This is based on the idea that Microsoft’s “cloud-related revenue streams will allow growth to continue at double-digit levels with operating margin expansion”, as quoted by Barrons.
Right now, Microsoft shares look grossly oversold at $236.15. From that price, I’d like to see the tech giant go up to $310. In the meantime, investors can see a dividend yield of 1.14%, waiting for MSFT stock to rally.
According to MacRumors.com, Apple is reportedly working on how to implement virtual and augmented reality in iOS devices or new hardware products. Additionally, the company is expected to launch an AR-VR product by 2023.
“Reliable sources like Apple analyst Ming-Chi Kuo and Bloomberg‘s Mark Gurman have indicated that the helmet will likely see a 2023 launch date, with the goggles to follow in 2024 or 2025,” they added.
Even better, Apple CEO Tim Cook is a big fan of virtual reality. “I think AR is a deep technology that will affect everything,” Cook said as quoted by CNBC. “Imagine being able to suddenly teach with augmented reality and demonstrate things that way. Or medically, etc. Like I said, we’re really going to look back and reflect on how we once lived without AR.
As for earnings, Apple is expected to release its numbers on October 27. Morgan Stanley analyst Erik Woodring thinks the company will exceed expectations. He also has an overweight rating on the stock, with a price target of $177 per share.
Nvidia (NVDA) is another virtual reality stock to consider.
After all, Nvidia created the Omniverse, a platform for connecting 3D worlds. The “omniverse platform enables creators to collaborate on 3D design projects, enables developers to create intelligent digital humans, and enables researchers to train AI models for self-driving cars and other autonomous machines,” as noted by Motley Fool contributor Trevor Jennewine.
The company also launched Omniverse Cloud for the industrial metaverse.
Thanks to it, companies can design new products, processes and even new installations in a virtual world before even marketing them. Lowe’s (NYSE:DOWN), for example. It has just teamed up with Nvidia and Magic Leap to create digital twins of interactive stores or virtual models of real-world objects.
Additionally, according to PYMNTS.com, “Nvidia Omniverse Enterprise metaverse technology is being used to build a digital twin of German rail operator Deutsche Bahn that will allow it to monitor operations across its entire network of 5,700 stations and 20 500 miles of track in real time.”
Then there is Matterport (NASDAQ:MTTR), which has massive exposure to digital twins. In fact, the company estimates that its total addressable market could be around $240 billion. This includes over four million digital buildings across many different industries.
The gains haven’t been too shabby either. In the first quarter, the company’s total subscriber count grew 70% to 562,000 year-over-year. Revenue jumped to $28.5 million, $1 million above the high end of its forecast. Additionally, the company’s non-GAAP loss per share of 10 cents was three cents higher than expected. To top it off, Matterport also has over $600 million in cash.
Unit software (you)
Unit Software (NYSE:you), as the name suggests, is a software platform provider that enables customers to develop 2D and 3D content for a wide variety of gadgets. These include virtual and augmented reality platforms.
More recently, Needham analyst Bernie McTernan issued a buy rating on Unity, with a price target of $50 on the stock. He noted that Unity’s software is one of the best in the world.
Unity’s Create platform, he added, is “best in class and stands to benefit from the growing demand for real-time interactive 3D content in games and beyond”, as quoted by Barrons. He also pointed to an increase in prices, which could be a substantial revenue generator in the long run.
At the date of publication, Ian Cooper had (neither directly nor indirectly) any position in the securities mentioned. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines. InvestorPlace.com contributor Ian Cooper has been analyzing stocks and options for online reviews since 1999.