Start the conversation
Virtual reality is an enticing technology with endless possibilities. It's already changing the way we consume media. This presents a great opportunity for investors. Below, we'll cover our four top virtual reality stocks for 2019.
When you strap on a virtual reality headset, you are an active part of the viewing experience. Televisions, computers, and cell phones all require physical or voice commands. But with virtual reality, your eyes can navigate the interface. VR takes you one step closer to complete immersion. And it's not just for movies and video games. Other industries benefit from VR technology, such as: healthcare, military, space, mental health, and education.
In 2018, VR hardware sales outperformed expectations. Analysts forecast $3.3 billion in revenue, but the total was $3.6 billion. This represents a 30% year-over-year increase in revenue, and virtual reality has a bright future. Analysts predict that the virtual reality market will reach $16.3 billion by 2022… and the companies below are leading the charge. Here are the top four virtual reality stocks to watch in 2019…
4 Virtual Reality Stocks
Virtual Reality Stock No. 1 – Facebook Inc. (NASDAQ: FB) predicted strong growth in the virtual reality market. The company bought Oculus for $3 billion back in 2014, and the Oculus Rift launched in 2016. It sold 1 million devices and still has plenty of room to grow. To compare, video game console sales are in the hundreds of millions.
The problem with the Oculus Rift and VR headsets is the high price point and consumers' uncertainty with the product. But going forward, production costs will decrease, and consumers will be more familiar with virtual reality.
CEO Mark Zuckerberg called virtual reality "the next major computing platform after mobile in about 10 years."
In March 2019, the company announced the Oculus Rift S and the Oculus Quest. The Oculus Rift S is a PC-connected VR headset with better performance geared toward more serious gamers. The Oculus Quest, an upgrade of the Oculus Go, is a standalone headset suited for a more casual VR experience. SuperData predicts the Quest should sell 1.3 million units and increase the consumer base. Both the Quest and the Rift S cost $399.
Mark Zuckerberg set a big goal of getting 1 billion VR users. With Zuckerberg and Facebook behind it, Oculus has a good shot to dominate the VR industry in the near future.
Virtual Reality Stock No. 2 – Sony Corp. (NYSE: SNE) is the industry leader in VR headset sales. According to SuperData, Sony's PSVR sold 700,000 units during the fourth quarter of 2018. By contrast, the Oculus Go only sold 555,000 units. Sony also confirmed that as of March 3, 2019, the company has sold 4.2 million units, which is more than any other VR company. Sony has a leg up on Oculus Rift and HTC Vive because it's already established in the gaming space. Not only is it cheaper, but PlayStation is a globally recognized gaming brand. That helps assure customers that they are getting a quality product.
One of the biggest hurdles for other VR companies is getting quality games for their systems. Because of PlayStation's long history, Sony can leverage its relationships with game developers to create games for the PSVR. Popular franchises like Tetris and Resident Evil are available on the PSVR. Game selection is huge factor for VR customers, and Sony is dominating.
Another reason Sony is leading the VR market is its lower price point. The Sony's PSVR costs $299 and only needs a PlayStation 4, which costs $399. That's a much lower combined entry point when compared to other systems. Other VR systems can cost over $1,000 when factoring in a required computer. So expect Sony to continue its strong presence in the VR market.
Virtual Reality Stock No. 3 – HTC Corp. (OTC: HTCCY) is going in a different direction than Facebook and Sony. The Oculus and PlayStation headsets are user-friendly and sold at a reasonable price. Reason being, those companies are trying to sell as many units to as broad an audience as possible. Bringing down the price comes with big trade-offs in terms of performance. HTC doesn't want to make any compromises.
The HTC Vive Pro Eye is increasing resolution and raising the price point. It's risky for HTC. The company is betting that mainstream adoption will come through better performance, not a cheaper price tag. The headset requires a PC connection but features high-resolution eye-tracking technology and can track your entire body's movements with additional features. All of these features make HTC's Vive Pro Eye cost $1,599.
Virtual Reality Stock No. 4 – Nvidia Corp. (NASDAQ: NVDA) is the largest vendor of high-performance graphics processors for personal computers. Without graphics processors capable of immense power, virtual reality isn't possible. So, Nvidia is benefitting from the virtual reality boom by proxy. Nvidia is a momentum stock that's up over 800% since 2014. In January 2014, the stock was trading at about $16. Shares now trade around $150.
Nvidia is positioning itself for the growing virtual reality market. Recently, the company announced VR Works, an extension for game and application developers. Nvidia is already the gold standard in the VR graphic processing world. Oculus and HTC recommend using Nvidia's graphic processors. With VR Works, Nvidia is signaling to other VR companies that it intends to continue its graphic processing supremacy. Nvidia should continue to grow from the virtual reality boom.