We recently published a list of 10 Best Virtual Reality Stocks to Buy Now. In this article, we are going to look at where Unity Software Inc. (NYSE:U) stands against other top virtual reality stocks.
Virtual Reality is a computer-generated simulation that allows users to interact with a three-dimensional environment. The four elements that characterize virtual reality and distinguish it from other technologies such as augmented reality and mixed reality are a 3D simulated environment, immersion, sensory engagement and realistic interactivity, as revealed by HP.
According to a report by Fortune Business Insights, the size of the global virtual reality market was estimated at $25.11 billion in 2023 and is expected to grow from $32.64 billion in 2024 to $244.84 billion in 2032, with a compound annual growth rate of 28.6% as forecast. period (2024-2032).
Regionally, North America is expected to dominate the global VR market over the forecast period. Another fast-growing region is Asia Pacific, where growth is driven by rising demand for immersive technologies in emerging economies. China, one of the major distributors of head-mounted VR devices and other hardware, is expected to have the largest market share in the region. At the same time, Europe is an early adopter of virtual solutions in the automotive industry and will experience significant growth, with Germany and Great Britain as leading markets.
The foundation for the virtual reality devices in use today was laid on the first head-mounted augmented reality display “The Sword of Damocles” which was introduced by Ivan Sutherland in 1968. While companies like Sega and Nintendo developed VR gaming systems in the 1980s and 1990s, it wasn’t until the 2010s that high-end VR headsets with powerful graphics and motion-tracking technology came to market. .
While gaming has driven VR’s popularity, the technology’s potential has been realized in a host of other industries. US shipping company UPS has committed millions to the advanced training of its drivers, with the company’s industry-leading training enabled through the use of virtual reality in an industrial training environment. Before drivers drive an actual delivery vehicle, the company’s Driving Simulator provides realistic driving experiences.
Virtual reality and augmented reality have also penetrated the healthcare sector as they offer transformative capabilities for medical training, patient care and therapeutic interventions. The treatment domains in which these technologies are used to treat patients are diverse and include pediatric diagnostics and treatments, pain management, mental health, neurological disorders, surgical planning, intraoperative procedures, telemedicine, as well as postoperative and other rehabilitation therapies. The penetration is evident from the fact that the US FDA has approved 69 medical devices that incorporate augmented reality and virtual reality.
Virtual Reality is also a game changer for the entertainment industry, especially for artists. Fortnite witnessed a record attendance of over 12 million attendees in 2020 for its virtual concert with hip-hop superstar Travis Scott. That’s why VR applications continue to spread across the world today. Renowned luxury car manufacturer BMW has materialized virtual reality experiences in the automotive sector. The company expanded its revolutionary driving experience with BMW M Mixed Reality, which blurs the boundaries between the physical and virtual worlds through state-of-the-art VR/MR technologies.
To compile a list of the 10 best virtual reality stocks to buy right now, we used stock screeners, ETFs and online rankings to create a comprehensive list of the relevant companies with the highest market capitalization. Ahead, we’ve shortlisted the top 10 stocks from our list with the highest number of hedge fund holders. The 10 best virtual reality stocks to buy now are ranked in ascending order of their hedge fund holders, as of Q2 2024.
At Insider Monkey, we’re obsessed with the stocks hedge funds are piling into. The reason is simple: our research shows that we can outperform the market by imitating the best stock picks from the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (see more details here).
Number of hedge fund holders: 34
Unity Software Inc. (NYSE:U) is the world’s leading platform for creating and operating interactive, real-time 3D (RT3D) content. The products give content creators the tools to create innovative RT3D experiences and deliver better processes for virtually any industry. It operates in more than 45 locations worldwide.
The Unity platform offers a range of software solutions for creating, running and generating interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles and augmented and virtual reality devices. The company plays a major role in the Virtual Reality space, with more than 60% of the top-grossing VR Steam experiences in 2023 made with Unity. Unity’s ecosystem of tools and services can help develop good VR experiences. More than 50% of week one Must Play Apple Arcade Games for Vision Pro and two of the three most popular Quest experiences are built with Unity. Likewise, more than 70% of the best-selling Quest games are made with Unity. In 2023, Unity shares soared after Apple announced that Unity’s gaming software would be used in Apple Vision Pro.
The overall market opportunity for Unity is enormous. As stated by the CEO in the Q2 2024 shareholder letter, Unity has provided critical tools and technology to a mobile games market that is 22% larger than in 2019. Mobile games account for 60% of the roughly $130 billion of consumer app spending. annually, while 70% of the top mobile games worldwide are built on Unity.
The company has laid the foundation for its next phase of growth with Unity 6, which is designed to be the most stable and best-performing version of Unity the company has ever released, providing developers with faster rendering and lighting capabilities and deeper support for growing platforms such as mobile internet and spatial computing.
Because the company enables developers to create immersive VR experiences, Unity Software Inc. (NYSE:U) an attractive VR stock that will potentially benefit from the growing Virtual Reality market.
Overall, U is in 7th place on our list of the best virtual reality stocks to buy now. While we recognize U’s potential as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns in a shorter time frame. If you’re looking for a deeply undervalued AI stock that’s more promising than U, but trades at less than five times earnings, check out our report on the cheapest AI stocks.
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Disclosure: None. This article was originally published on Insider monkey.
