In this article, we will be taking a look at the 12 best virtual reality stocks to buy heading into 2024. To skip our detailed analysis of the VR market, you can go directly to see the 5 Best Virtual Reality Stocks To Buy Heading into 2024.
What is Virtual Reality (VR)?
Virtual reality is a technological phenomenon that allows people to interact with and within an artificial 3D visual or sensory environment. It is dependent on computer modeling and simulation. The most common image that comes to your mind when you’re thinking about VR is most likely a person wearing a seemingly heavy headset that seems almost alien. This is one of the most common representations of VR technology since, through devices like these headsets, users can engage in an artificial but three-dimensional environment.
The most common use of VR today is gaming, with several VR games being developed, such as Beat Saber, Tetris Effect, and Superhot VR. However, today this technology is being used in many other fields and areas, such as healthcare, education, and entertainment. As a result, many companies such as Advanced Micro Devices, Inc. (NASDAQ:AMD), Apple Inc. (NASDAQ:AAPL), and Meta Platforms, Inc. (NASDAQ:META) are steadily becoming key players within the VR industry and are considered by many to be among the best VR stocks to buy heading into 2024.
Developments In the VR Industry
One of the most prominent developments in the VR industry this year includes the entry of Apple Inc. (NASDAQ:AAPL) within this space with its Vision Pro headset in June. The big tech giant had been in talks of entering the metaverse for quite some time, and these discussions finally bore some fruit with the launch of the new Apple product at an astonishing price of $3,499. Despite the exorbitant launch price, Apple enthusiasts and analysts who have been covering the stock determinedly maintained the buzz surrounding this new project upon its launch.
Apple Inc.’s (NASDAQ:AAPL) CEO, Tim Cook, noted at the company’s annual WWDC event that the Vision Pro headset would introduce the world to “spatial computing,” just like the MacBook introduced us to “personal computing,” and the iPhone introduced us to “mobile computing.” The launch has been applauded by the general public, financial analysts, and other players in the VR industry. For instance, Cher Wang, CEO of the Taiwanese HTC, told CNBC this June that Apple Inc.’s (NASDAQ:AAPL) entry into the VR space is a “validation for the industry” and a “watershed moment” since it validates everything companies like HTC have been working on as far as virtual reality is concerned. With the entry of a major tech player in this space, Wang sees greater public interest and confidence in the global market for VR technologies and products.
However, Apple Inc. (NASDAQ:AAPL) is not the only noteworthy company an investor can look at when considering VR stocks. Our list below highlights several other companies that can be considered to be some of the best VR stocks to buy heading into 2024. This virtual reality stocks list is sure to point investors in the right place as it includes a mix of pure-play companies creating VR technologies along with other companies whose products are vital for the advancement of VR.
Photo by David Grandmougin on Unsplash
Our Methodology
We selected the best virtual reality stocks to buy heading into 2024 by considering Insider Monkey’s hedge fund data for the third quarter. The stocks are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest number.
Best Virtual Reality Stocks To Buy Heading into 2024
12. NetEase, Inc. (NASDAQ:NTES)
Number of Hedge Fund Holders: 25
NetEase, Inc. (NASDAQ:NTES) is a Chinese interactive home entertainment company. It engages in online games, music streaming, online intelligent learning services, and internet content services businesses. The company has been working to incorporate VR gaming within its portfolio since 2016 with the Twilight Pioneers VR game.
A Buy rating was maintained on shares of NetEase, Inc. (NASDAQ:NTES) on November 17 by Fawne Jiang, an analyst at Benchmark. The analyst also raised the firm’s price target on the stock from $130 to $140.
There were 25 hedge funds long NetEase, Inc. (NASDAQ:NTES) in the third quarter, with a total stake value of $1.03 billion.
Like Advanced Micro Devices, Inc. (NASDAQ:AMD), Apple Inc. (NASDAQ:AAPL), and Meta Platforms, Inc. (NASDAQ:META), NetEase, Inc. (NASDAQ:NTES) is among the best virtual reality stocks to buy heading into 2024.
11. Universal Display Corporation (NASDAQ:OLED)
Number of Hedge Fund Holders: 25
A total of 25 hedge funds were long Universal Display Corporation (NASDAQ:OLED) in the third quarter. Their total stake value was $266 million.
Universal Display Corporation (NASDAQ:OLED) is a semiconductor company based in Ewing, New Jersey. The company researches, develops, and commercializes organic light-emitting diode (OLED) technologies for use in display and solid-state lighting applications. VR sets such as the PlayStation VR 2 and Vision Pro use OLED technology, making Universal Display Corporation (NASDAQ:OLED) a key player in this area.
Roth MKM analyst Scott Searle maintains a Buy rating on shares of Universal Display Corporation (NASDAQ:OLED) as of November 3. The analyst also placed a price target of $176 on the stock.
Point72 Asset Management was the most prominent shareholder in Universal Display Corporation (NASDAQ:OLED) at the end of the third quarter, holding 366,368 shares in the company.
10. Unity Software Inc. (NYSE:U)
Number of Hedge Fund Holders: 27
On November 10, Parker Lane, an analyst at Stifel, maintained a Buy rating on shares of Unity Software Inc. (NYSE:U). The analyst also placed a price target of $28 on the stock.
Unity Software Inc. (NYSE:U) is an application software company based in San Francisco, California. The company operates a platform providing real-time 3D development tools and services. It is partnering with companies like Apple for the development of VR headsets like Vision Pro to make it easier for developers to use its software and tools, and is among the top VR stocks to buy heading into 2024.
Unity Software Inc. (NYSE:U) had 27 hedge funds long its stock in the third quarter, with a total stake value of $1.7 billion.
White Brook Capital Partners mentioned Unity Software Inc. (NYSE:U) in its second-quarter 2023 investor letter:
“Unity Software Inc. (NYSE:U): We took a trading position in Unity Software during the quarter. A trading position is one where I expect the duration of the investment to be relatively short at the time of investment. During the first quarter, I completed much of the work and viewed Unity as attractive based on valuation, but decided to pass. Behind that decision were fundamental questions around corporate governance and the probability that Apple, at the unveiling of their headset, would either go alone in providing tools for developers to produce content for their new augmented and virtual reality efforts or also announce a wide settlement with Unity’s primary competitor, Epic Games, of all outstanding legal matters and a new partnership. Instead, Unity is being relied upon to help developers. Due to continuing concerns around their incentive plan and the strength of the board, it is unlikely that the position will prove to be a multiyear holding, but they are very likely beneficiaries of growth in artificial intelligence and virtual reality in the short term.
Unity theoretically benefits from several trends coming together at once.
1.Augmented and virtual reality were unveiled too early, they’re not permanent busts. Artificial Intelligence advances should improve automation efforts that make it easier for developers to produce more intricate and complex environments and games in three-dimensional space. Improvements in chip development, notably Apple Silicon, but also by competitive chip manufacturers like NVidia and AMD, should also improve playback and interaction of three-dimensional worlds…” (Click here to read the full text)
9. Sony Corporation (NYSE:SONY)
Number of Hedge Fund Holders: 21
Fisher Asset Management was the largest shareholder in Sony Corporation (NYSE:SONY) at the end of the third quarter, holding 6.01 million shares in the company.
Sony Corporation (NYSE:SONY) is a consumer electronics company based in Tokyo, Japan. The company designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets. It has its own VR headset, which is compatible with the PlayStation consoles, named the PlayStation VR.
We saw 21 hedge funds long Sony Corporation (NYSE:SONY) in the third quarter. Their total stake value in the company was $784.5 million.
8. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 44
Baidu, Inc. (NASDAQ:BIDU) is an interactive media and services company based in Beijing, China. The company operates through its Baidu Core and iQIYI segments. It launched a VR App, XiRang, in 2021 to enter the metaverse industry, which can be used while wearing VR headsets, and is one of the best VR stocks to buy for 2024.
Baidu, Inc. (NASDAQ:BIDU) was spotted in the 13F holdings of 44 hedge funds in the third quarter, with a total stake value of $1.7 billion.
Jiong Shao at Barclays maintains an Overweight rating on Baidu, Inc. (NASDAQ:BIDU) shares as of November 1. The analyst also placed a price target of $138 on the stock.
Here’s what Ariel Investments said about Baidu, Inc. (NASDAQ:BIDU) in its second-quarter 2023 investor letter:
“By comparison, after a strong run last quarter, China’s internet search and online community leader, Baidu, Inc. (NASDAQ:BIDU) declined alongside a correction in Chinese stocks attributed to weak gross domestic product. We believe this price action runs counter to the company’s solid business fundamentals. Baidu delivered a top- and bottom-line earnings beat in the period, driven by a recovery in ad and cloud revenues. The company continues to invest heavily in Artificial Intelligence (AI) and is launching a generative AI, Ernie Bot, aimed at rivaling Open AI’s ChatGPT. While monetization of the new technology is largely dependent on regulatory review, we think Baidu should continue to experience margin improvement with the ongoing implementation of efficiency and profitability initiatives. While some investors remain on the sidelines due to uncertainty surrounding China’s economic growth, government regulations, and the political rhetoric towards Taiwan, we remain enthusiastic about Baidu’s longer-term opportunity for revenue growth and margin expansion across internet search, cloud, autonomous driving, artificial intelligence and online video.”
7. QUALCOMM, Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 67
Shares of QUALCOMM, Incorporated (NASDAQ:QCOM) were upgraded from Hold to Buy on November 3 by Ingo Wermann at DZ Bank. The analyst also announced a $140 price target on the stock.
Our hedge fund data for the third quarter shows 67 hedge funds long QUALCOMM, Incorporated (NASDAQ:QCOM), with a total stake value of $2.3 billion.
QUALCOMM, Incorporated (NASDAQ:QCOM) is a semiconductor company based in San Diego, California. The company develops and commercializes foundational technologies for the wireless industry. It offers VR products under the Snapdragon brand, such as the Snapdragon XR2 5G Platform, which united 5G and artificial intelligence to provide an excellent augmented reality and VR experience.
Holding 3.6 million shares in the company, Citadel Investment Group was the largest shareholder in QUALCOMM, Incorporated (NASDAQ:QCOM) at the end of the third quarter.
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 110
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company. It provides the LiquidVR™ technology that enables realistic and advanced VR experiences through powerful processors and graphics.
Suji Desilva at Roth MKM initiated coverage on Advanced Micro Devices, Inc. (NASDAQ:AMD) with a Buy rating and a $125 price target on November 14.
In total, 110 hedge funds were long Advanced Micro Devices, Inc. (NASDAQ:AMD) in the third quarter. Their total stake value was $9.2 billion.
Like Apple Inc. (NASDAQ:AAPL) and Meta Platforms, Inc. (NASDAQ:META), Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the best virtual reality stocks to buy heading into 2024.
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Disclosure: None. 12 Best Virtual Reality Stocks To Buy Heading into 2024 is originally published on Insider Monkey.
