12 Best Virtual Reality Stocks to Buy According to Analysts

10. Meta Platforms, Inc. (NASDAQ:META)

Analyst Upside: 23.42%

Number of Hedge Fund Holders: 262

Meta Platforms, Inc. (NASDAQ:META) builds technological products that allow people to share, connect, grow businesses, and find communities. These products help people connect through personal computers, mobile devices, virtual reality (VR), mixed reality (MR) headsets, and wearables. It operates through two segments: Family of Apps (FoA) and Reality Labs (RL). The Reality Labs segment encompasses virtual, mixed, and augmented reality-related software, hardware, and content.

The company has made significant progress toward VR and AR technologies, recently releasing an augmented reality prototype called Orion, one of its most ambitious projects. Reality Labs, dedicated to VR and AR innovations, is known for its substantial financial investments in these emerging consumer platforms. In April 2024, Meta Platforms, Inc. (NASDAQ:META) announced plans to develop Meta Quest headsets that provide trainers, teachers, and administrators access to education-specific features and apps. The company launched the Meta for Education beta program in November 2024 across the US and UK, offering academic institutions an immersive VR/MR learning ecosystem.

Meta Platforms, Inc. (NASDAQ:META) has solid financials to continue progressing in the domain. The company reported a 22% revenue growth to $164.5 billion in fiscal 2024, while earnings grew by 60% year-over-year to $23.86 per share. Its operating income grew by 48% to $69.4 million, giving the company an operating margin of 42%. The firm expects Reality Labs sales to increase at a double-digit rate over the upcoming 5 years.

Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter:

“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on investment, accounting for the timing and magnitude of cash flows over the holding period.

For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6-year holding period.

Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)