In July 2016, a strange phenomenon was visible in parks and open spaces. People of all ages were wandering around outside, alone, in pairs, and in groups, examining the world through smartphones and mobile devices. Every so often they got excited, tapped a few buttons, and then resumed their wandering.
Those who weren’t in the know felt a bit mystified, but people who keep up with the tech industry knew what was happening. Pokemon Go, a new sort of augmented reality game, had captured imaginations.
In its first year, Pokemon Go users spent $832 million – and that figure has only gone up. By October 2019, lifetime spending on the game topped $3 billion. Players were thrilled with the concept of seeing their favorite Pokemon characters overlaid in their real-world environment.
The Outlook for Augmented Reality
Pokemon Go might have been the first augmented reality game to capture mainstream attention and generate massive revenues, but it certainly won’t be the last – and gaming is just one of the ways augmented reality is being integrated into daily life.
Navigation systems are beginning to add augmented reality features, as are retailers, marketers, and advertisers. Museums and historic sites are generating enthusiasm with tours enhanced by augmented reality, and augmented reality filters have taken social media by storm.
In short, there is no end to the potential uses of augmented reality, and adoption is still in an early stage. Companies on the cutting-edge of this technology can look forward to virtually unlimited growth over the next decade.
One report projects the global AR market will see a compound annual growth rate (CAGR) of 55.8 percent from 2020 to 2025.
Another expects the global augmented reality and virtual reality markets to realize revenues of up to $1.3 billion between now and 2030.
These are five of the best augmented reality stocks to buy for investors who want to get on-board now.
Facebook Oculus Has Been A Massive Hit
Oculus had a strong place in the early AR market, which is what made it so appealing to social media giant Facebook.
Facebook acquired Oculus in 2014, and it is in the process of moving legacy Oculus IDs to the Facebook platform.
Once this transition is complete in January of 2023, Oculus users will enjoy the latest in AR technology combined with the features of a full-service social media platform.
Investors interested in entering the AR space while keeping some level of diversification may determine that Facebook is the best of both worlds.
Though the platform is free to users, Facebook has mastered the art of monetizing user data, and it is creating a massive fortune through paid advertising.
Even 2020, one of the most difficult years in economic history, was no match for Facebook. The company increased revenue from advertising by 21 percent year-over-year.
It’s no wonder businesses choose Facebook for their marketing – the site boasts 2.8 billion monthly active users.
When the other Facebook brands are added into the equation – e.g. WhatsApp and Instagram – a stunning 3.3 unique users log in at least once a month.
The company’s market cap lead some to speculate that it may soon hit the $1 trillion mark.
HiMax Technologies Makes The Chips Behind AR
Augmented reality relies on cutting-edge technology to create a truly immersive experience. While HiMax doesn’t sell finished AR products, it is critical to the overall success of the industry.
HiMax is actually a semiconductor company, and it makes display driver chips. These manage the colors within visual displays.
HiMax products are some of the best available, so they are in high demand. That fact drove share prices up an impressive 194 percent over the past year.
In 2020, sales increased by 57.7 percent, and adjusted earnings per share hit $0.20. That’s a 170 percent increase that exceeded the guidance set by HiMax leaders.
Most analysts agree that HiMax has more room to grow, and the median forecast calls for an increase of at least 22.4 percent over the next 12 months. In other words, it’s a smart buy.
Matterport Has Created A Remarkable AR Experience
The announcement that Matterport will merge with special-purpose acquisition company (SPAC) Gores Holdings VI has many investors intrigued.
Matterport developed one of the most remarkable AR technologies available to date. Essentially, Matterport’s app makes it possible to scan physical spaces – even whole buildings – and create a digital replica.
The most obvious use for this technology is in the real estate industry, but that is just the beginning. Given that the app offers accurate measurements and detailed images, it is likely to find clients in interior design, construction, building management, and furniture sales almost immediately.
Matterport projects exponential growth over the next few years, promising investors a 73 percent gross margin and $747 million in revenue by 2025. That may or may not be accurate, but most agree that the company is likely to deliver shareholder value.
Snap Has A Proven History Of Innovation
Snapchat has earned its place in the social media industry by offering users something more than a way to communicate.
It is a leader in augmented reality and special effects for images, allowing users to entertain and astonish with an endless array of photo enhancements.
Snapchat’s parent company, Snap Inc., is ready to do more than innovate in the social media space. While it will carry on its role as a major player in social media, it wants to see its technology used as a tool.
Snap’s lenses and filters represent some of the most advanced AR technology available, which has made it appealing to a variety of business clients. Some – like Major League Baseball – are partnering with Snap to integrate these tools into their own apps.
In other words, Snap is ready to be taken seriously as a camera company, and it seems investors are in favor of the company’s new direction.
In 2020, revenues increased 62 percent year-over-year, which exceeded analyst expectations. In early February, Snap’s leaders announced that they expect growth rates of at least 50 percent per year in coming years.
That sent share prices up, and some industry experts say this is the lowest Snap stock will ever be.
Vuzix Incorporates AR Into Regular Eyewear
Vuzix might not be well-known in AR circles, especially since it is often classified as an eyewear company. However, that doesn’t begin to explain exactly what Vuzix does.
This eyewear is far more than traditional glasses, sunglasses, and so forth. It incorporates augmented reality into eyewear – a combination referred to as smartglasses.
Some users buy Vuzix products for fun, but the primary application is business. Healthcare providers, manufacturers, field service providers, warehouse workers, and automotive companies have incorporated Vuzix into their workflow.
By designing enterprise solutions, Vuzix has created a niche within the larger AR field. In that niche, it is far and away the market leader.
In the past year, Vuzix has seen share prices increase from less than a dollar to more than $24 per share. Considering it has only scratched the surface of its market potential, those who invest today are likely to see strong returns.
Best Augmented Reality Stocks To Buy Now
Before long, augmented reality will be a natural part of daily routines as we work, shop, and play. Companies able to deliver the highest-quality AR technology are expected to be big winners over the next decade.
Vuzix, Facebook’s Oculus, the Matterport SPAC, HiMax, and Snap are all smart choices for investors who want to be part of the action – but they aren’t the only game in town.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.