The virtual reality (VR) stocks and trends are lukewarm, even cold, compared to just a few years ago. Undoubtedly, the big tech titans, including some Magnificent Seven firms you may be familiar with, have been doing their best to advance the field. And though there have been setbacks and limited uptake in new headsets to this day, don’t expect the frontrunning VR stocks to walk away from the dream of digital reality, even if the road to mainstream adoption is more than seven years away.
While VR headsets may be nothing new, recent hardware advancements and the rise of generative artificial intelligence (AI) could set the stage for a future reignition in metaverse-related investor interest. However, it will take some time before metaverse-tied R&D translates to growth metrics that attract analysts’ attention.
Regardless, every step forward in on-device processing power and generative AI could mean several steps forward in spatial computing. And with that, here are three VR stocks that may entice everyday consumers to put down their phones and strap into their headsets in as little as a few years.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) stock returns after briefly flirting with a bear market. Now up over 15% in around two weeks, many investors wonder if there’s another leg higher for the number-one AI hardware stock.
Big-name analyst Ben Reitzes of Melius Research seems to think NVDA stock is a no-brainer buy on recent weakness. After hiking his price target to $1,125 from $1,000 in response to the ongoing GPU “gold rush,” he makes a pretty strong case for picking up a few shares on weakness as the public cloud continues sparing no expense at this point in the AI boom.
Looking further ahead, Nvidia is a potentially massive VR and AR enabler with its Omniverse platform and VRWorks suite. Indeed, many of us tend to concentrate on the headset makers themselves as the top VR players. But let’s not lose sight of the firms putting the tools in the hands of creators.
We’ll have to wait and see if Nvidia can lead the masses into VR. If Omniverse is that new growth avenue, perhaps it’s about time we view the firm as more than just a GPU maker in the right place at the right time.
Sony (SONY)
Sony (NYSE:SONY) is probably the best VR headset stock to buy for the future of gaming. Some firms view the enterprise as the major source of early VR growth. Enterprise firms have more money to spend on such emerging tech!
Sony is more concerned with capturing demand from everyday consumers looking to explore the next frontier in video gaming. At this juncture, I view Sony as the VR play that investors should pursue if they believe play, not work, will be the top reason people strap on a headset.
The company’s PlayStation VR (PSVR) headset has been intriguing for quite a while now. Though the latest PSVR 2 headset, launched more than a year ago, maybe one of the best gaming-focused VR devices on the market, it’s been hit with some sluggish sales recently.
Even with price hikes thrown in, demand has ground down enough to cause Sony to halt production until it has a chance to clear some inventory. Such news has caused an overhang in the stock lately. Still, I find PSVR 2 demand weakness more tied to industry softness than anything specific to Sony.
As more games are released while consumer wallets are replenished, one has to think sales will pick up again. At 18.9 times trailing price-to-earnings (P/E), SONY stock looks like a great buy on the year-to-date dip.
Roblox (RBLX)
Roblox (NASDAQ:RBLX) stock has been a year-to-date laggard that’s really struggled to gain ground after crumbling back in early 2022. Despite the long growth runway ahead, with ample investment in developer tools and generative AI, many investors seem to be growing impatient over the firm’s lack of profits. Undoubtedly, Roblox still seems more focused on growth than cutting its way to better profitability.
Goldman Sachs’ Eric Sheridan may not be a raging bull on RBLX stock, but he does see the firm as a “well-positioned company” to play the “metaverse and creator economy themes.” Indeed, Sheridan hit the spot with Roblox. You’re gaining exposure to two hot themes with one battered stock.
As intriguing as the company’s VR prospects are (Roblox launched its beta VR app last summer), I think its creator economy will receive a huge boost as it continues rolling out new AI tools.
On the date of publication, Joey Frenette did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
