We recently published a list of 10 Best Virtual Reality Stocks To Buy Now. In this article, we are going to take a look at where QUALCOMM Incorporated (NASDAQ:QCOM) stands against other best virtual reality stocks.
Overview of the Global VR Market
Virtual Reality is a computer-generated simulation that allows users to interact with a three-dimensional environment. The four elements that characterize virtual reality and differentiate it from other technologies such as augmented reality and mixed reality are a 3D-simulated environment, immersion, sensory engagement, and realistic interactivity, as revealed by HP.
According to a report by Fortune Business Insights, the global virtual reality market size was valued at $25.11 billion in 2023 and is expected to grow from $32.64 billion in 2024 to $244.84 billion by 2032, at a compound annual growth rate of 28.6% during the forecast period (2024-2032).
Region-wise, North America is expected to dominate the global VR market over the forecast period. Another rapidly growing region is Asia Pacific with growth driven by the rising demand for immersive technologies in emerging economies. China, one of the major distributors of head-mounted VR devices and other hardware, is forecasted to have the highest market share in the region. Simultaneously, Europe is the early adopter of virtual solutions in the automotive industry and will be experiencing significant growth, with Germany and the UK as its leading markets.
How is Virtual Reality Transforming Today’s World?
The virtual reality devices used today have their foundation laid on the first head-mounted augmented reality display “The Sword of Damocles” which was introduced by Ivan Sutherland in 1968. While firms such as Sega and Nintendo developed VR gaming systems in the 1980s and 1990s, it was not until the 2010s that high-quality VR headsets boasting powerful graphics and motion-tracking technology came to the market.
While gaming has been driving the popularity of VR, the potential of the technology has been realized in a multitude of other industries. The American shipping company UPS committed to millions for the advanced training of its drivers, with the firm’s industry-leading training powered by the use of virtual reality in an industrial training environment. Before drivers operate an actual delivery vehicle, the company’s Driving Simulator provides realistic driving experiences.
Virtual reality and augmented reality have also penetrated the healthcare sector as they offer transformative opportunities for medical training, patient care, and therapeutic interventions. The treatment domains in which these technologies are used to treat patients are diverse and include pediatric diagnostics and treatments, pain management, mental health, neurological disorders, surgery planning, intraoperative procedures, telemedicine, as well as post-operative and other rehabilitation therapies. The penetration is evident from the fact that the US FDA has authorized 69 medical devices that incorporate augmented reality and virtual reality.
Virtual Reality is also changing the game for the entertainment industry, especially for artists. Fortnite witnessed a record turnout of more than 12 million attendees to its virtual concert featuring the hip-hop superstar Travis Scott in 2020. Therefore, VR applications continue to spread around today’s world. The renowned luxury car manufacturer BMW has materialized virtual reality experiences in the automotive space. The company expanded its revolutionary driving experience with BMW M Mixed Reality which tends to blur the boundaries between the physical and virtual worlds through state-of-the-art VR/MR technologies.
An aerial view of a bustling semiconductor production zone showcasing the company’s integrated circuits.
Our Methodology
In order to compile a list of the 10 best virtual reality stocks to buy now, we utilized stock screeners, ETFs, and online rankings to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best virtual reality stocks to buy now have been arranged in ascending order of their hedge fund holders, as of Q2 2024.
At Insider Monkey we are obsessed with 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).
QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 100
QUALCOMM Incorporated (NASDAQ:QCOM) is a global technology leader that helps to bring intelligent computing everywhere through the development and commercialization of foundational technologies. The firm has three reportable segments and conducts business primarily through its QCT (Qualcomm CDMA Technologies) semiconductor business and its QTL (Qualcomm Technology Licensing) licensing business. Meanwhile, the QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments.
The firm is setting the stage for a new digital future through its virtual reality technologies which enable new realms of truly immersive user experiences. Qualcomm’s virtual reality solutions help original equipment manufacturers and developers introduce devices that include graphics with high pixel density, develop avatars with nuanced facial expressions, and immerse users with 3D spatial sound for clear voice interactions.
The Snapdragon VR products are the best VR chipsets from Qualcomm. The Snapdragon XR2 platform leverages AI, 5G, on-device processing, and edge cloud processing for photorealistic visuals and life-like responsiveness. The firm combines the compute power of the Snapdragon XR2 platform and top perception technologies to allow accessible and engaging learning, training, and entertainment VR experiences that seem real. Additionally, the company is making mobile VR a reality. By designing for the extreme requirements of fully immersive mobile VR, Qualcomm Technologies is in a unique position to deliver superior VR experiences. The firm’s solutions currently power many leading mobile VR solutions.
QUALCOMM Incorporated (NASDAQ:QCOM) closed the fiscal year with strong results in the fourth quarter. The firm witnessed a growth in EPS of over 30% year-over-year. The key segments performed well with QCT’s revenue up 18% and QTL’s revenue up 21%, year-over-year. Overall, the fiscal year 2024 results remained robust, marked by an over 20% EPS growth and a record free cash flow of $11.2 billion.
QUALCOMM Incorporated (NASDAQ:QCOM) is transforming the way we experience reality with its premium virtual reality offerings powering devices that are truly immersive and intelligent. As of Q2, the stock is held by 100 hedge funds and thus ranks on our list of the best VR stocks to invest in.
Overall, QCOM ranks 6th on our list of best virtual reality stocks to buy now. While we acknowledge the potential of QCOM 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 QCOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.