Virtual Reality and Augmented Reality are currently at an inflection point, where smartphones were before the launch of the iPhone.
Virtual Reality is an emerging technology that uses hardware such as a headset or smart glasses to create a virtual environment for users. These environments can be for multiple use cases such as movies, television shows, gaming, ultra-realistic video conferencing, product marketing, virtual tourism, and the increasingly popular metaverse, a complete digital clone of our world with its property rights/digital assets, etc. However, virtual Reality’s most considerable and highest-revenue potential is gaming and entertainment, as VR can transform the content experience and generate a level of immersion that is impossible with traditional hardware.
On the other hand, Augmented Reality is a combination of our real-world surroundings and technological augmentation. One of the most popular augmented reality products globally is a mobile game called Pokemon Go, where players have to complete game-related tasks in the real world. While software-based AR is increasingly getting popular, for example, smartphones that allow you to measure actual distances with the help of its sensors or the trendy filters that are available on Instagram and Facebook, hardware-based AR is on the verge of going mainstream. The front-runner for hardware-based AR is smart glasses that will have transparent displays and be designed to be used in conjunction with a phone to display navigation, text messages, etc. Tech giants Snapchat and Facebook already have AR smart glasses for sale. AR/VR will also be particularly effective in powering the next generation of marketing and e-commerce as people will possibly be able to try out clothes, shoes, and accessories nearly realistically from the comfort of their homes as this technology can render the items on a person’s body digitally.
Other fascinating use cases of AR/VR are in healthcare as these glasses can help doctors in critical surgeries. Apart from direct use cases, there are multiple ancillary uses for technologies developed for AR/VR. For example, transparent or translucent displays will have interesting application wearables, vehicle infotainment displays, and consumer electronics. AR/VR is possibly the solution to the piracy-free direct-to-consumer cinema on a per-ticket basis as these glasses or devices can only be used by one person at a time, thus protecting content publishers from losing revenue due to people buying a single ticket and then viewing the content in a group, and secondly, the design of AR/VR glasses would prevent people from using a camera to record the content for piracy. There are also very attractive use-cases for live-sports streaming due to the level of immersion offered by these technologies.
Best Virtual Reality & AR Stocks for Canadians
Here are some of the best AR/VR companies to invest in –
Facebook (NASDAQ: FB)
Facebook is one of the first mega-tech companies to get on to the VR/AR train. The company acquired Oculus, a leading AR/VR consumer electronics startup, in the last decade and has since invested heavily in the technology. The company has also been acquiring a bunch of smaller companies in the same space from the gaming and entertainment sectors to build a complete AR/VR ecosystem. Facebook has a very strong advantage over other players as it has a massive balance sheet and, more importantly, a very big user base. Facebook has announced plans to invest $3 billion in this technology over this decade.
Facebook is a star in the AR/VR game because its entire ecosystem plays on the biggest strengths of AR/VR. The company’s massive user base will lead to highly successful use of technology for teleconferencing, marketing/sales, gaming, and video content. The company currently offers a range of VR headsets that start at $299 and recently launched a pair of smart glasses in collaboration with Ray-Ban.
In Q2’21, Facebook reported revenues of $29 billion (up 55% YoY), an operating profit of $12.37 billion (up 107% YoY), and a net profit of $10.39 billion (up 100% YoY).
Microsoft (NASDAQ: MSFT)
Microsoft is a global leader in computer software, and over the past few years, it has also done increasingly well in consumer electronics with its Surface and Xbox lines. With Xbox, the company has a stronghold on the burgeoning gaming market, and over the past few years, it has made a bunch of small acquisitions of game developer companies. It also has a high-end VR headset offering called HoloLens that has met with lukewarm success, but the company is committed to launching a mass consumer offering.
Microsoft’s near-monopoly in the consumer software space with Windows and gaming with Xbox puts it in a dominant position to build products in harmony in terms of software and hardware design, an advantage that few companies enjoy. For Q2’21, Microsoft reported a revenue of $46.1 billion (up 21% YoY), operating income of $19.1 billion (up 40% YoY), and net profit of $16.4 billion (up 46.9% YoY).
Sony (NYSE: SONY)
Sony is one of the pioneers and global leaders in the consumer electronics space. The company is one of the most prominent players in video devices like TVs, cameras, and, most importantly, gaming. With the Playstation, Sony is one of the most successful gaming companies in the world. The company currently has a VR gaming offering called the Playstation VR headset, of which they have sold five million+ units.
The company is an excellent investment because it will give investors a broader exposure to VR than other companies on this list due to the in-app revenues that Sony receives as commissions due to its ownership of the Playstation Network. Sony is also heavily investing in its catalogue of VR content, and its massive reach from its network gives it a head start over competitors with a smaller user base.
In Q2’21, Sony reported a revenue growth of 14.9%, operating income growth of 24.2%, and net profit growth of 8.9%, which is very respectable considering that the current global chip shortage is severely hampering its sales.
Apple (NASDAQ: AAPL)
Apple is one of the biggest consumer technology companies globally as it practically created the app ecosystem that we know today. The company is the undisputed consumer electronics king with many super successful products like the iPhone, iPad, Apple Watch, and the Mac line. It is almost apparent that the company has its eye on the VR/AR space and has plans to dominate it as it does others.
The company recently acquired a startup called NextVR that specializes in VR content. This is a sign of the companies ambitions to be a significant VR player. Further, there are abundant rumours of the company launching an AR/VR headset by the end of 2021/2022 and AR outdoor wearables by 2023.
In Q2’21, Apple reported revenues of $81.4 billion (up 36% YoY), an operating profit of $24 billion (up 84% YoY), and a net income of $21.7 billion (up 93% YoY).
Unity Software (NYSE: U)
While Unity is not directly an AR/VR company, its software is heavily used to develop large-scale AR/VR content, mainly gaming. The company hit an inflection point when its software was used to develop the super-hit Pokemon Go franchise, which hands down the most popular AR game globally. Following the success of Pokemon Go, the company’s software is practically a staple in the AR/VR development community and gaming community. This is an excellent ancillary play on the growth of AR/VR due to low competition in the sector and the company’s massive market share. The company also has a fruitful and long-standing partnership with Google to develop AR/VR content on Android and to develop virtual reality artificial intelligence.
After years of funding from the creme-de-la-creme of VC, the company went public in 2020 and has since generated a 93% return for investors. Over the past year, the company acquired a RestAR, which develops deep learning and computer vision software specifically for AR purposes.
In the June quarter, the company reported a revenue of $273 million (up 48% YoY), an operating loss of $98.78 million (down 297 % YoY), and a net loss of $148 million (down 442% YoY). The company’s duo of sharp revenue growth and declining losses are signals that profitability is around the corner.
Spectra7 MicroSystems (CVE: SEV)
Spectra7 is one of the most innovative companies in the VR/AR space. The company is a core hardware manufacturer and aims to become a major vendor to big AR/VR consumer product companies. To do this, the company has designed its suite of processors, high-bandwidth cables, and sensor suites.
The company’s processors can help companies build AR/VR headsets that can drive up to 5K resolutions, more than most high-end televisions. It has also developed its sensors and high-bandwidth wiring that are smaller, higher performance, and more power-efficient than other competing technologies. In addition, the company has designed a special chip for AR applications that uses a super-thin cable from a host device, such as a smartphone. This can be used to build a super-cheap AR headset where most of the computing will be done on the smartphone; it uses its proprietary high-bandwidth cable as wireless technologies like Bluetooth don’t have enough bandwidth and aren’t entirely lag-free. While the company has been a poor performer since its debut, the rise of AR/VR as a sector could reverse its fortunes as its addressable market was tiny till now.
For Q2’21, the company reported revenues of C$733K (up 185% YoY), an operating loss of C$1.42 million (up 15% YoY), and a net loss of C$1.33 million (up 20% YoY).
UrbanImmersive (CVE: UI)
UrbanImmersive is a SaaS (Software-as-a-Service) company that helps brands build immersive experiences that can be used for marketing, e-commerce, or profiling purposes. For example, the company’s software is used by real estate agents to build a complete VR mockup of a property that they are trying to sell. The agent can then use this mockup to show clients the highly immersive property and expand their reach dramatically. The company’s software also has extensive uses in other forms of marketing, especially after AR/VR hardware becomes more ubiquitous.
The company has also developed a 3D emulator that content creators can use to make their productions VR-ready as it is designed to be used in post-production. This part of the business holds significant promise as the demand for content is insatiable in today’s world. There is already a massive trove of popular content that will be needed to be converted into VR format.
For Q2’21, UrbanImmersive reported revenues of C$1.1 million (down 33% YoY), an operating loss of C$237k (down 204% YoY), and a net loss of C$248k (down 689% YoY).
ImagineAR Inc. (CNSX: IP)
ImagineAR is a Software-as-a-Service company that aims to democratize AR content for SMEs, large businesses, and individual content creators. The company has two main products, ImagineAR desktop and ImagineAR mobile; the former can be used by brands and content creators to build AR experiences for mobile without having to write code or have any technical knowledge, while the latter is to be used by the audience to consume the AR content on their phones.
The company recently partnered with Microsoft Azure for cloud services and has plans to launch a new product that will help creators build AR experiences directly for popular social media platforms like Instagram, Snapchat, and Facebook, thus doing away with the requirement of downloading a new app and dramatically increasing the reach of the AR content.
In the company’s latest quarterly results, it reported revenues of C$99k (up 1200% YoY), operating income of C$1.94 million (down 96% YoY), and a net loss of C$2.29 million (down 95% YoY).
NexTech AR Solutions (CNSX: NTAR)
NexTech AR is also an AR Software-as-a-Service company that helps company’s build AR experiences for a host of uses like virtual conferencing, large-scale virtual events, virtual marketing, virtual demonstrations, virtual education, etc. Many blue-chip clients use the company’s software like Amazon, Johnson, and Johnson, etc. COVID has been a blessing for the company as it normalized virtual conferences and trade shows, one of its biggest markets.
In the latest quarter, Q2’21, the company reported a revenue of C$6.09 million (up 72% YoY), an operating loss of C$7.32 million (down 262% YoY), and a net loss of C$5.85 million (down 192% YoY). As you can see, the company is growing very rapidly and is reporting lower losses on much higher revenue, suggesting that profitability is near.
ARHT Media (CVE: ART)
ARHT Media is an AR hardware manufacturer that uses a system developed to create life-like holograms. The company’s system includes an invisible background 3D screen, lighting arrays, and a host of sensors. The market for this product is in talk shows, stage presentations, virtual and in-person conferences, and other big audience environments. In addition, with the rise of social media, digital content is booming like never before, thus giving this company colossal headroom to grow.
In the June Quarter, ARHT Media reported revenues of $1.21 million (up nearly 2800% YoY), an operating loss of $1.28 million (down 153% YoY), and a net loss of $1.58 million (down 182% YoY).
As you can see, tech titans and small companies alike are gearing up to partake in the upcoming VR/AR boom. We hope you like the article and consider investing in the AR/VR trend. Further, the pandemic has come as a blessing for AR/VR as it accelerated digitization and caused a secular shift in work culture. These developments have drastically increased the appeal of AR/VR. As a result, many companies, small and large alike, are now investing heavily in the technology to enable nearly realistic experiences/interactions digitally without needing gathering people together, thus making the said content extremely important scalable.
Canadian Augmented & Virtual Reality Stocks (AR/VR)
Augmented reality is a complex technology with many moving parts, including chipsets, sensors, headsets, FBS and displays. The technology superimposes virtual objects on a natural scene in real-time and uses existing environments to add information and create new artificial environments. For example, depth sensor cameras are used to measure the distance between locations and digital objects.
Augmented Reality shares share companies that develop and produce augmented reality hardware and software, including chipsets, 3D sensors, headsets, haptic technology, laser projection, varifocal displays and semiconductors. Augmented reality is becoming increasingly popular with integrating mobile games and apps and competes with technologies similar to virtual reality. Unfortunately, there are few pure augmented reality stocks and companies that focus exclusively on augmented reality. Still, you can add AR technology to your portfolio by investing in companies that contribute to the technology.
AR is a form of technology that superimposes sound and images on what we observe. In this way, AR optimizes our experience of the world around us and contributes to our perception. Microvision and Nvidia are working to improve and advance their expertise by merging AR and artificial intelligence.
While other companies are perfecting their first-generation AR hardware, NVIDIA is thinking about the next generation of AR technologies. The adoption of virtual reality technologies is expected to grow and is an important industry. As augmented reality technologies become more sophisticated and business applications becoming cost-effective, demand for investment in AR will increase.
While virtual reality is slow, many industry observers see it as the next evolution in the entertainment industry. Virtual reality advances come from the video game industry, making waves in markets like medicine, business architecture, and manufacturing. Virtual reality technology is just a whisper in Canada, but some say the volume will pop up in a few years for virtual reality stocks.
Virtual reality (VR), a broad term that describes a user-created interactive experience in a simulated environment, represents the next significant paradigm shift in computing. Once regarded as transmitting science fiction films, VR is becoming a tangible market where real-life companies develop powerful technologies to improve the end-user experience. For example, technology companies create immersive experiences for gamers around the world using VR, augmented reality (AR) and other immersive technologies that incorporate core competencies in fantasy sports, big data, artificial intelligence, mobile and video games, and develop interactive fan ownership platforms for businesses, media outlets, nonprofits and charities.
The mission of the company is to create new dimensions of engagement, experience and entertainment for fans. Global Gaming Technologies Corp. focuses on the gamification of content through visual and cinematic platforms. The company’s strategy is to publish games and content with immersive storytelling, bold design and innovative user interface.
Ydreams Global Interactive Technologies Inc. anticipates future challenges, connects them to market needs, develops innovative concepts and delivers them with international excellence. Ydreams works with companies and brands to transform their strategies into relevant, people-centric ventures that combine digital experiences with physical presence at venues. Companies manufacture virtual reality hardware, including patent-pending VR-9 and DreamweVR cable connector technology chips that enable advanced devices to achieve higher resolutions.
IDC reports that global spending on AR and VR is expected to rise from $12 billion in 2020 to $72.8 billion in 2024. Technology companies such as Facebook, Oculus, HTC, Sony (SNE), Apple (AAPL), Unity Software (U) and Lenovo are trying to penetrate the growing VR market, making it attractive for investors. Virtual reality can be volatile, and good VR stocks can be hard to come by, but a proactive approach can help you get the ball rolling.
Global expenditure on AR / VR products and services is expected to reach a CAGR of 5.4% between 2020 and 2024. Allied Market Research estimates that the virtual reality market will go over one billion by 2025. As it becomes a reality for millions of people, it is no wonder that game companies, broadcasters and media companies turn to technology.
NBC Olympics offered more than 50 hours of live virtual reality coverage with Intel True VR at the XXIII Winter Olympics in Pyeongchang, South Korea. Augmented reality (AR) came into the mainstream in the summer of 2016, when the Pokemon Go craze caught the eye. According to a study by Market Watch, the virtual reality market is expected to grow over the next five years from $7.9 billion in 2018 to over $44.7 billion. As interest in games and entertainment grows, so too does the good of large technology companies.
Augmented reality (AR) is gaining a name for itself in e-commerce, technology and education. It connects the real and virtual worlds to give us a real-life experience. Yet, as ubiquitous as AR is, investors can tap into the leading technology stocks in various ways beyond what was once considered the field of technology berths.
The company’s share gain of 29.5% in the last six months is higher than the 20.3% increase in the electronics and semiconductor industry. Chief Executive Evan Spiegel said the company had built a significant lead in augmented reality, and smartphones-based augmented reality would be an important growth driver in the long term. The company has an AR ecosystem that includes lenses and gaming experiences and sells glasses with AR glasses.