11 Stock Picks In The $80B VR Market

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11 Stock Picks In The $80B VR Market
February 3, 2017
Photo by Justin Sullivan/Getty Images

 

1. GOOGLE

 

SAN FRANCISCO, CA - MAY 28: Alphabet, the parent company to Google Inc., launched its first virtual reality viewer in 2013 and has continued to invest in VR with projects like Google Cardboard and 360-degree video on Youtube. Suggesting continued investment in VR/AR, the company also recently appointed Clay Bavor, who previously managed Cardboard, Gmail, Docs, and Drive, to lead a new virtual reality division. Rumor has it that Google is already building a new version of Glass and has secretly distributed the product to health care, manufacturing and energy companies.

2. ADVANCED MICRO DEVICES

 

Advanced Micro Devices (AMD) builds computing and graphics processors, which are central for high quality VR gaming. The company already has established partnerships with equipment manufacturers, headset manufacturers and software developers. Additionally, new virtual reality devices such as the highly anticipated Oculus Rift can only operate with higher-end graphics processing units, such as those from AMD.

3. FACEBOOK

 

Facebook is in a top spot to capitalize on virtual reality advertising revenues due to its $2 billion acquisition of Oculus, a virtual reality technology vendor, in March 2014. Oculus currently focuses on video gaming, but Mark Zuckerberg plans to expand the scope of the technology to include digital communication. Oculus recently launched pre-orders for its Oculus Rift head-mounted-display device, which it will sell at cost for $599. Selling at cost may harm Facebook's profit margins; however, potential future advertising revenues are likely to makeup for any losses.

4. GOPRO

 

As the leading action camera vendor, GoPro is well-positioned to profit from the content creation and image capture areas of virtual reality. In fact, the company already offers spherical video capture for professionals with camera mounts that can accommodate up to 16 cameras, such as the Google Odyssey. GoPro will continue to expand its presence in spherical video capture by selling multi-camera mounts to general consumers. Not to mention, the camera vendor also acquired Kolor in April 2015 to enhance its photo and video editing software offerings.

5. TAIWAN-BUSINESS-TECHNOLOGY

 

HTC has co-developed Vive, a virtual reality headset, with major PC game platform company Valve. HTC has combined its experiences in smartphone technology with Valve's software gaming expertise and established online user base, to ensure a strong entry into the virtual reality gaming market. Vive is expected to be a fierce competitor to Oculus Rift, sporting better displays and lower input costs — not to mention access to Valve's existing 100 million global members. In the image to the left, a fan wears a HTC Vive headset and holds two sensors during a promotional event held by HTC in Taipei on December 15, 2015.

6. LARGAN PRECISION

 

As a leader in camera lenses for consumer electronic devices, Largan is likely to become the top producer of miniature lenses to supply VR/AR companies. According to analysts, the company is prepared to meet demands from a multitude of virtual reality head-mounted-device producers since it is already capable of producing a wide variety of lenses. With a superior reputation to its competitors, Largan has the potential to control a significant share of analysts' predicted 500 million future annual shipments of magnifying lenses for VR/AR technologies. The image to the left shows co-founders of Largan Precision, Scott Lin (left) and Tony Chen (right).

7. MICROSOFT

 

Within the growing VR/AR space, Microsoft has focused on augmented reality advancements by partnering with companies like Autodesk to build products for engineering and healthcare professionals. The software company has already announced a 1Q16 launch date for the Microsoft HoloLens, a wireless holographic computer, which will sell on the retail market for $3,000. In the image to the left, a customer looks at Microsoft's HoloLens at Microsoft's first flagship store on Fifth Avenue on October 26, 2015 in New York City. (Photo by Bryan Thomas/Getty Images)

8. NVIDIA

 

Nvidia, a graphic processor technology company, may see long-term growth in the VR technology boom due to its "best-in-class"; graphics cards. Similar to AMD, Nvidia is in an ideal competitive position because leading VR device companies, such as Oculus and HTC, can only use certain high-end graphics cards with existing technologies. Nvidia has also formed partnerships with about 250 companies to create new virtual reality applications for consumer and enterprise use.

9. QUALCOMM

 

Qualcomm currently services all major handset and tablet companies, so it is no stranger to the business of connected devices. As a large producer of chipsets, Qualcomm will recognize profits from virtual reality devices, which will feature cellular, WiFi or Bluetooth functionalities. The company's application processing technology also supports graphics processing units, which accelerate the creation of images and are a vital component of VR/AR products. In the image to the left, Qualcomm Incorporated CEO Steve Mollenkopf (L) and Philips CEO Jeroen Tas participate during a keynote address at the 2015 International CES at the Las Vegas Convention Center on January 6, 2015 in Las Vegas, Nevada. (Photo by David Becker/Getty Images)

10. SAMSUNG ELECTRONICS

 

Samsung Electronics (SEC) is using its position as the world' largest mobile phone and TV manufacturer to bridge the divide between smartphones and virtual reality. SEC partnered with Oculus in September 2014 to build Gear VR, a virtual reality headset is compatible with Samsung Galaxy smart phones. Unlike other virtual reality devices, Gear VR is wireless and powered by smartphone. Samsung has also adopted a lower $200-$100 price range for its Gear VR products, which heighten consumer purchases for a compatible Samsung smartphones. In the image to the left, the Oculus-made Samsung Gear VR Virtually Reality headset is on display at the Oculus Connect 2 event in Hollywood, California on September 24, 2015.

11. SONY

 

In addition to being powerhouse in gaming, music, film, television and electronics, Sony is a virtual reality veteran. Sony first researched and developed virtual reality products in the 1990s, which provides a strong foundation for the release of PlayStation VR, the virtual reality headset to operate with a gaming console. Analysts have high hopes for PlayStation VR due to PlayStation's enormous userbase, large supply of third party content and high compatibility for third party developers.

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