In this article, we will discuss the 8 Best Augmented Reality Stocks Under $5 to Buy.
As per Ericsson, smartphones are central to the AR experience in the US and this technology’s role continues to evolve. Once simple gateways to AR, smartphones are now sophisticated platforms bridging the physical and the digital worlds and empowering AR content creation and consumption. The convergence of artificial intelligence (AI), mainly Generative AI (GenAI), and AR is expected to become the catalyst for bringing XR into mainstream life.
Future Trends in AR
As per Appinventiv, autonomous vehicles continue to become more and more popular in the world. The integration of AR into these vehicles continues to help the broader AR industry. The use of AR technology in autonomous vehicles hints at substantial improvement in the realms of transportation safety and efficiency, as per AZoRobotics. Through overlaying digital data in the real world, AR technology helps boost comprehension of the environment for the driver and the autonomous system. As a result, the combination of AR and AV technologies helps in creating a safer, more efficient, and intuitive driving experience.
As per Grand View Research, global augmented reality in automotive market size was pegged at USD 10.41 billion in 2023. This should grow at a CAGR of 41.2% from 2024 to 2030. With the help of AR technology in showrooms, consumers can interact with virtual 3D models of vehicles. This will enable them to visualize several customizations.
The integration of 5G into AR/VR landscapes is expected to revolutionize industries. As per Idea Usher, one business application is the investment in cloud-based AR/VR solutions, leveraging 5G’s low latency and high bandwidth. This should enable seamless remote collaboration and data streaming.
Next, the advent of WebAR has been gaining significant traction. Web-based Augmented Reality is a relatively new technology and, in this, the mobile application is not required to function. Market experts believe that WebAR should help in enhancing accessibility and user engagement. This is done by combining digital content with physical environments. Future trends among these consist of IoT devices, hardware improvements, and 5G connectivity.
Market Drivers of Augmented Reality
The AR market has seen significant growth due to the dramatic increase in investments. Leading technology giants continue to pump billions of dollars into the AR sector. As per SkyQuest, the largest investment is going into training and industrial maintenance, with the figure sitting at US$4.1 billion in the field of AR. Apart from this, private firms, VCs, and some governments are financing the research institutes. The company believes that industries including consumer, aerospace and defense, healthcare, and retail form the user base of AR.
Additionally, the hospitals and other medical care setups continue to see the use of immersive modalities to help healthcare professionals. As per SkyQuest, the AR in the healthcare industry is expected to hold a market size of US$1.2 billion by 2024. The surgeons are dependent on AR to tackle the risks involved. This results in fewer errors and accordingly unsafe surgeries.
A person wearing augmented reality glasses experiencing a virtual reality world.
Our Methodology
To list the 8 Best Augmented Reality Stocks Under $5 to Buy, we used the Finviz screener and sifted through several online rankings. After getting the list of 25-30 stocks, we extracted the ones trading at lower than $5 and narrowed our list to the following 8 stocks. Finally, we arranged the stocks in the ascending order of their hedge fund sentiments, as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Best Augmented Reality Stocks Under $5 to Buy
8) ImagineAR Inc. (OTC:IPNFF)
Stock Price as of 18 October: $0.0757
Number of Hedge Fund Holders: N/A
ImagineAR Inc. (OTC:IPNFF) offers engaging and interactive content to users via a cloud-based augmented reality (AR) platform under the ImagineAR brand name.
Wall Street expects that ImagineAR Inc. (OTC:IPNFF)’s expansive patent portfolio should continue to act as the primary tailwind. The company announced that it has retained global law firm Greenberg Traurig, LLP. The collaboration further strengthens the company’s commitment to safeguard and maximize the value of its cutting-edge patent portfolio and underscores ImagineAR Inc. (OTC:IPNFF)’s strong dedication to defending its intellectual property as it continues to revolutionize the AR landscape.
Moving forward, the company’s innovational capabilities are expected to support its long-term growth. Furthermore, in a bid to strengthen its market position, ImagineAR Inc. (OTC:IPNFF) signed a 3-year SDK platform license agreement with S3iai to deliver immersive AR experiences integrated with proprietary GenAI interactions for a client project.
ImagineAR Inc. (OTC:IPNFF) focuses on integrating its patented global AR self-publishing platform with proprietary LLM (Large Language Model) interactive platforms. The recent multi-year agreement expects to be the transition to the next generation of AR solutions fully immersive with GenAI.
The company revealed that it saw a positive response from Queens Park Rangers (QPR) Football Club fans who were taking videos and photos with their favorite players from the QPR mobile app. This was the first UK Professional Soccer team that integrated the ImagineAR SDK into their mobile app developed and supported by mobile app developer Urban Zoo. ImagineAR Inc. (OTC:IPNFF) plans to leverage the implementation to market the SDK platform to several other UK clubs.
7) Nextech3D.AI Corporation (OTC:NEXCF)
Stock Price as of 18 October: $0.0500
Number of Hedge Fund Holders: N/A
Nextech3D.AI Corporation (OTC:NEXCF) offers augmented reality technologies, wayfinding technologies, and 3D model services.
Wall Street analysts believe that Nextech3D.AI Corporation (OTC:NEXCF)’s gross margin should continue to expand through the end of 2024. The improvement should stem from better operating leverage within the company. Moreover, as and when Amazon starts promoting Nextech3D.AI Corporation (OTC:NEXCF)’s 3D modeling services to its merchants, it can see strong growth in its revenues. This new development, which might take some time to scale, should have a significant positive impact and can lead Nextech3D.AI Corporation (OTC:NEXCF)’s growth trajectory.
Further optimism for revenue generation stems from the pursuit of enterprise contracts by Nextech3D.AI Corporation (OTC:NEXCF). Earlier in the year, it landed a $1.8 Million 3D Modeling Deal with NASDAQ 100 Technology Company. Wall Street is optimistic about the company’s acquisition of augmented reality (AR) try-on technology from Designhubz. The company continues to strengthen its position in the market and platform in 3D and AR technologies and this acquisition complements its existing tech.
The integration of Designhubz’s advanced AR technology should enable Nextech3D.AI Corporation (OTC:NEXCF)’s result in enhancing product engagement.
The company’s strategic move to India in late 2023 was successful in enhancing its cost structure and scalability. The investment in AI technology has streamlined its operations and positioned it at the forefront of innovation in the 3D modeling industry. Such initiatives should result in long-term growth and a competitive edge. Moving forward, Nextech3D.AI Corporation (OTC:NEXCF) can see meaningful revenue growth as it continues to secure additional enterprise 3D modeling contracts.
6) The Glimpse Group, Inc. (NASDAQ:VRAR)
Stock Price as of 18 October: $0.64
Number of Hedge Fund Holders: 1
The Glimpse Group, Inc. (NASDAQ:VRAR) is a virtual reality (VR) and augmented reality (AR) platform company, which is engaged in providing enterprise-focused software, services, and solutions in the US.
Despite the challenging environment, The Glimpse Group, Inc. (NASDAQ:VRAR) secured significant contracts with the Department of Defense, which should boost revenues in FY 2025. The company believes that Q1 2025 revenues will exceed Q4 2024 figures. The Glimpse Group, Inc. (NASDAQ:VRAR) has announced the divestiture of 2 wholly owned subsidiaries i.e., QReal, LLC, and Glimpse Turkey. This should offer an initial value of ~$4.0 million, which excludes potential further equity upside.
The Glimpse Group, Inc. (NASDAQ:VRAR) entered into partnerships with NVIDIA, Microsoft, and AT&T. These partnerships are expected to offer a competitive edge. These recent developments form part of the broader strategy which includes a focus on facilitating future Annual Recurring Revenue opportunities. Therefore, the company expects a revenue increase in FY 2025.
Overall, The Glimpse Group, Inc. (NASDAQ:VRAR)’s commitment to maintain gross margins and focus on enhancing market position via strategic partnerships and opportunities in the defense sectors are expected to support its growth trajectory over the near term. Its strategy consists of proving the value of its solutions in a bid to facilitate future ARR opportunities.
The company’s long-term strategy is centered around ARR and strategic partnerships. Brightline Interactive, which is a wholly-owned subsidiary of The Glimpse Group, Inc. (NASDAQ:VRAR), announced the signing of a Cooperative Research and Development Agreement (CRADA) with the United States Army Combat Capabilities Development Command (DEVCOM), Command, Control, Communication, Computers, Cyber, Intelligence, Surveillance and Reconnaissance (C5ISR) Center.
5) MicroVision, Inc. (NASDAQ:MVIS)
Stock Price as of 18 October: $1.12
Number of Hedge Fund Holders: 7
MicroVision, Inc. (NASDAQ:MVIS) develops and sells lidar sensors and software that is used in automotive safety and autonomous driving applications.
MicroVision, Inc. (NASDAQ:MVIS) continues to focus on the US and EU markets, where American lidar companies are favored. The company appears to be well-positioned to capture demand in the lidar market, given its product portfolio and focus on high-volume passenger car projects. It has sufficient liquidity and engineering resources to cater to capital needs for the upcoming 12 – 18 months. MicroVision, Inc. (NASDAQ:MVIS) focuses on capturing market share in the industrial space by offering high-resolution lidar and advanced software solutions.
The company sees 905-nanometer lidar technology as stable and cost-effective for long-term automotive production. MicroVision, Inc. (NASDAQ:MVIS) targets deeper collaboration with automotive OEMs and customized software solutions.
Wall Street analysts believe that the company’s strategic initiatives and financial management demonstrate a positive outlook amidst the evolving lidar market. Given the targeted efforts in the automotive and industrial segments, together with a focus on American lidar technology, MicroVision, Inc. (NASDAQ:MVIS) appears to be well-placed to navigate the challenges and capitalize on the opportunities ahead.
With a potential ramp in revenues from multiple heavy equipment customers starting in 2025, MicroVision, Inc. (NASDAQ:MVIS) appears to be on a sustainable path for multiple years ahead as it secures higher volume automotive opportunities. With the lower cash burn in Q3 2024, the company has been realizing the benefits of improved productivity to extend its financial runway and execute near-term revenue opportunities. In Q3 2024, the cash used in operations came in at ~$14 million as compared to cash used in operations of $20 million.
Analysts at Cantor Fitzgerald reiterated a “Neutral” rating, giving a $3.00 price objective on 22nd July.
4) Perfect Corp. (NYSE:PERF)
Stock Price as of 18 October: $1.94
Number of Hedge Fund Holders: 9
Perfect Corp. (NYSE:PERF) is an artificial intelligence software as a service company that offers artificial intelligence (AI)- and augmented reality (AR)-powered solutions for beauty, fashion, and skincare industries.
Wall Street analysts expect that Perfect Corp. (NYSE:PERF)’s top line should continue to be aided by the growth momentum in revenue of AI- and AR-cloud solutions and mobile app subscriptions. Moving forward, the company’s fundamental position is expected to be strengthened by AI- and AR-powered cloud solutions, subscription revenue, and healthy advancements in AI technologies. Given the proven track record and ongoing AI innovations, Perfect Corp. (NYSE:PERF) appears to be well-positioned to sustain business growth and continue delivering value to customers and shareholders.
Perfect Corp. (NYSE:PERF) announced the launch of its new ‘AI Skincare Product Recommendation’ tool. The feature, which is integrated into the backend console system, is expected to utilize advancements in the company’s AI to simplify, streamline, and accelerate the setup process for skincare brands via the company’s AI Skin Analysis technology by automatically identifying which skincare concerns each of a brand’s products aims to target.
For 3 months that ended June 30, 2024, the company’s AI- and AR-cloud solutions and subscription revenue came in at $12.9 million, reflecting a rise of 17.4%. This growth stemmed from strong demand for its online virtual product try-on solutions from brand customers, the robust momentum in the growth of YouCam mobile beauty app subscriptions, and the popularity of its Gen AI technologies and AI editing features for photos and videos.
Perfect Corp. (NYSE:PERF) reiterated its expectation that the YoY growth rate of total revenue in 2024 is expected to range from 12% – 16% compared to 2023.
3) Vuzix Corporation (NASDAQ:VUZI)
Stock Price as of 18 October: $1.30
Number of Hedge Fund Holders: 11
Vuzix Corporation (NASDAQ:VUZI) is engaged in designing, manufacturing, and marketing smart glasses and augmented reality (AR) technologies and products.
Vuzix Corporation (NASDAQ:VUZI) continues to pursue strategic partnerships and cost management strategies. These include a voluntary payroll reduction and an emphasis on converting smart glass inventory into cash. It remains optimistic about the future, courtesy of its strong intellectual property portfolio and the maturing enterprise market regarding smart glasses. Vuzix Corporation (NASDAQ:VUZI) remains focused on optimizing its waveguide technology, which is critical for the future of smart glasses.
The company has been exploring partnerships with projection engine partners in a bid to enhance user experience. Vuzix Corporation (NASDAQ:VUZI) focuses on reducing deployments in smart glass inventories and seeks licensing opportunities for waveguide technology. Moving forward, the company’s strong IP portfolio and innovation capabilities in the AR space are expected to act as principal tailwinds.
Market experts believe that the company’s waveguide technology offers a strong competitive advantage, providing a comprehensive service in design, production, and integration. The partnership and strategic investment by Quanta Computer focused on manufacturing waveguides at scale and jointly developing new AI smart glasses for broader markets. Vuzix Corporation (NASDAQ:VUZI) continues to explore enterprise market opportunities with Vuzix AI smart glasses, which include Vuzix Z100™.
As per Wall Street, the shares of Vuzix Corporation (NASDAQ:VUZI) have an average target price of $3.00.
2) Conduent Incorporated (NASDAQ:CNDT)
Stock Price as of 18 October: $3.93
Number of Hedge Fund Holders: 18
Conduent Incorporated (NASDAQ:CNDT) offers digital business solutions and services for the commercial, government, and transportation spectrum in the US, Europe, and internationally. In 2020, the company announced the launch of its Augmented Reality (AR) solution, available to customers throughout its commercial and public sector service lines.
Wall Street remains optimistic about the company’s technology partnerships with Microsoft and Oracle. These are expected to continue to enhance revenue opportunities and cost efficiencies of Conduent Incorporated (NASDAQ:CNDT). The company’s strategic divestitures, along with technology partnerships, continue to form key components of its growth strategy. With a strong focus on cost management and addressing client demands, Conduent Incorporated (NASDAQ:CNDT) has been positioning itself to achieve its financial targets and strengthen its market presence.
Industry veterans opine that the company’s portfolio optimization plan should aid its growth trajectory. Conduent Incorporated (NASDAQ:CNDT) announced that it has wrapped up the sale of its Casualty Claims Solutions Business to MedRisk. This was the third in the company’s portfolio optimization plan, enabling it to further improve its balance sheet and advance its capital allocation strategy.
Conduent Incorporated (NASDAQ:CNDT)’s streamlined portfolio and the infusion of new and proven leadership should place the company well for the future as it advances its solution sets and leverages a strong culture. For FY 2024, the company expects adjusted revenue in the range of $3,325 million – $3,375 million and adjusted EBITDA margin of 4% – 5%.
As per Insider Monkey’s Q2 2024 data, Conduent Incorporated (NASDAQ:CNDT) was part of 18 hedge fund portfolios.
1) Sabre Corporation (NASDAQ:SABR)
Stock Price as of 18 October: $3.66
Number of Hedge Fund Holders: 19
Sabre Corporation (NASDAQ:SABR) is the largest global distribution systems provider for air bookings in North America for the travel industry. The company partnered with Groove Jones in a bid to create a series of “AR Portals” to help demonstrate their Commercial and Operations technology API platforms to customers.
The market veterans believe that Sabre Corporation (NASDAQ:SABR) is expected to be aided by its strong competitive advantages. Its product offerings and market position help create a network effect. The company highlighted the potential of SabreMosaic, which can transform the broader airline IT business into a growth sector over the medium to long term. Sabre Corporation (NASDAQ:SABR)’s competitive edge in air distribution bookings and its momentum in the Hospitality Solutions business should aid its growth trajectory in the near term.
Sabre Corporation (NASDAQ:SABR) has been gaining market share in air distribution bookings and appears to be well-positioned for corporate travel growth. The company secured several commercial wins and partnerships, including with North American travel agencies and a large leisure agency in France. Sabre Corporation (NASDAQ:SABR) continues to experience market share gains and acceleration in various regions and customer segments.
Overall, the company’s strategic partnerships, together with its competitive edge in air distribution and Hospitality Solutions, should drive growth. As per Wall Street, the shares of Sabre Corporation (NASDAQ:SABR) have an average price target of $3.75.
While we acknowledge the potential of SABR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than SABR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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