We recently published a list of 10 Best Augmented Reality Stocks To Buy Now. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against other best augmented reality stocks to buy now.
According to a report by Mordor Intelligence, the global augmented reality (AR) market has a market size of $42.48 billion as of 2024. The market is expected to grow at a compound annual growth rate (CAGR) of 42.36% and reach $248.38 billion by 2029. The Asia Pacific region is expected to be the fastest-growing market, but the largest market for the domain is anticipated to be North America.
A significant portion of the market is mobile AR, which leverages the globally spread use of smartphones, tablets, and other smart devices. Estimates show that around 1.7 billion devices are capable of supporting mobile AR as of 2024. The widespread and massive existing smartphone user base lends mobile AR a key advantage.
While AR glasses such as Orion have to face steep challenges to establish themselves as a widespread global phenomenon, mobile AR benefits from “zero-cost” hardware as a majority of people around the globe already own smart devices. A well-known example is Pokémon GO, a 2016 video game where players explore their surroundings to find virtual characters on their phones. The game quickly became a global sensation due to its existing hardware: mobile phones.
Future Trends in the Augmented Reality Industry
Although the AR market is around a decade away from attaining its full potential, several technological advancements in the industry are accelerating its pace. Tech giants have been running after the dream of AR and mixed reality for years, and are investing billions of dollars in the endeavor. According to SkyQuest, the largest investment is being poured into training and industrial maintenance, with figures reaching as much as $4.1 billion in the field of AR. Apart from this, private firms, VCs, and even some governments are financing AR research institutes and teams.
The primary user base of augmented reality includes industries such as aerospace and defense, healthcare, consumer, and retail. Hospitals and other medical care startups are continually taking strides in employing immersive modalities to help healthcare professionals. With surgeons increasingly relying on AR to tackle the potential risks of healthcare procedures, the rate of errors in the industry is expected to continually fall, and so is the number of potentially unsafe surgeries. According to SkyQuest, the AR segment in the healthcare industry is expected to reach $1.2 billion by 2024.
Another expected future trend in the industry is the increased application of AR in the automotive industry. With autonomous vehicles becoming more common across the globe, the integration of AR in these vehicles is supporting the broader AR industry. Through overlaying digital data in the real world, AR technology helps improve the driver and the autonomous system’s comprehension of their environment. In addition to several other features, consumers can interact with virtual 3D models of vehicles with the help of AR technology in showrooms, allowing them to visualize several customizations.
Our Methodology
In this article, we reviewed online rankings and ETFs to determine 25 companies operating in the AR space. We then selected the 10 most popular stocks among elite hedge funds. We sourced the hedge fund data from Insider Monkey’s database, as of Q3 2024. Our focus was on companies producing AR-related hardware, software, or technologies used to develop augmented reality products. However, we also included companies that offer services essential to the AR industry, like semiconductor chips.
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).
A wide view of an Apple store, showing the range of products the company offers.
Apple, Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets personal computers, smartphones, tablets, wearables, accessories, and various related services and platforms. It also manages Darwin AI, specializing in visual quality inspection using its Explainable AI platform. The company is also a major player in the AR industry, significantly contributing to it by releasing the Apple Vision Pro mixed reality headset in February.
The Apple Vision Pro has more pixels than a 4K TV for each eye, and blends digital content with a user’s physical space seamlessly. It is continuing to deliver unique spatial experiences, including immersive experiences like Submerged, the new short film. Vision Pro boasts more than 2,500 native spatial apps and 1.5 million compatible apps for visionOS 2. Apple Inc. (NASDAQ:AAPL) is continuing to work on the platform, recently announcing plans to bring Vision Pro to the UAE and Korea.
Apple Inc. (NASDAQ:AAPL) has one of the largest AR platforms in the world, with hundreds of millions of AR‑enabled devices, and thousands of AR apps on the App Store. Its AR apps on iPad help students learn and visualize better. In addition, US San Diego Health is the first hospital across the globe using Apple Vision Pro’s spatial computing apps in clinical trials for patient surgery in the operating room, reflecting its continued momentum.
The company reported a revenue of $94.9 billion in fiscal Q4 2024, making a September record and experiencing a 6% growth from last year. Much of this growth was attributed to the iPhone growing in every geographic segment, setting a new September quarter revenue record for the category. The company’s Services segment also set an all-time record, increasing by 12% year over year.
The company announced Apple Intelligence in June, an advanced personal intelligence system amalgamating the power of generative models with personal context. Apple Inc. (NASDAQ:AAPL) recently made the first set of Apple Intelligence features available in US English for iPad, iPhone, and Mac users, including a more conversational Siri, systemwide Writing Tools, a more intelligent Photos app, and more.
Apple Inc. (NASDAQ:AAPL) is set to release additional intelligence features in December, including more powerful Writing Tools, ChatGPT Integration, a new visual intelligence experience building on Apple Intelligence, and several others. More features are expected to roll out in the coming months. The stock ranks fifth on our list of the best augmented reality stocks to buy now.
Overall, AAPL ranks 5th on our list of best augmented reality stocks to buy now. While we acknowledge the potential of augmented reality stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AAPL 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.
