Stock market investing can be intimidating, but it’s the large multi-year trends could potentially make you a millionaire. Virtual reality (VR) is one such trend, offering the potential for significant financial gains for those willing to take the risk. Moreover, with the market pulling back, it’s an excellent time to load up on some virtual reality stocks offering long-term upside.
VR isn’t a novel concept, but the latest developments in hardware and the pervasiveness of generative AI could take things up a notch or two. Moreover, over the years, we’ve seen how VR’s use cases extend far beyond its traditional gaming and entertainment roots. To put things in perspective, the global VR market is projected to grow to more than $22 billion by 2025 from under $12 billion in 2022. Having said that, here are three virtual reality stocks to buy that could be long-term multi-bagger investments.
Top Virtual Reality Stocks: Sony (SONY)
VR has always been about video gaming and tech giant Sony (NYSE:SONY) is the best exponent of this trend. Many consider it to be an industry pioneer, having been one of the biggest needle-movers in the VR realm. Its PlayStation VR is the culmination of 23 years of ambitions in the niche, producing one of the finest gaming-focused VR headsets.
However, the latest iteration of Sony’s VR headset in PSVR 2 has been hit by demand weakness on the back of broader market headwinds. Sales have dropped since its release in February last year, with shipments tanking 50% on a year-over-year (YOY) basis in the fourth-quarter of 2023 (Q4). Sony has paused production since then and is looking to clear out its unsold inventory.
Nonetheless, the softness in demand is mostly linked to the slowdown in the gaming sector. A combination of factors is at play there, but from a purely product perspective, the PSVR is as good as it gets.
Roblox (RBLX)
Roblox (NASDAQ:RBLX) was blazing the VR trial before it was cool! The metaverse gaming platform has been empowering its massive userbase to create, share, and explore immersive virtual experiences long before the VR hype. It experienced a meteoric rise during the pandemic, with millions flocked to its platforms, resulting in record top-line growth.
Despite stumbling for a while post-pandemic, Roblox is back in form, beating top-line estimates in each of the four quarters last year. RBLX stock, though, hasn’t followed suit, with investors fixated over the lack of profits. However, it appears that the company will continue prioritizing growth over cost-cutting measures.
Moreover, its investments in developer tools and AI could add new layers to its bombastic growth story. Also, with double-digit gains in its active user base over the past several quarters, the company projects at least 20% growth through 2027. Hence, RBLX is a bona fide growth stock with the tools to grow at a healthy pace.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) made a strong comeback last year, effectively addressing the issues that marred its performance in 2022. The focus in 2023 was on Meta’s AI initiatives, cost-cutting measures, and other strategic moves, which resulted in a significant 50% surge in free cash flows.
However, a couple of years ago, we thought Meta was moving in a completely different trajectory. Meta’s trajectory was all about its VR and AR initiatives and its goal of commercializing the metaverse. Though these plans took a backseat in 2022, I feel it’s unlikely that Meta will keep the foot off the gas for long.
Its CEO and founder, Mark Zuckerberg, talked about how the metaverse represents the next frontier of the internet. These comments allude to how Meta is aiming to capitalize on the full potential of VR. Moreover, following its blow-out results in 2023, it now has the impetus to get the ball rolling again.
On the date of publication, Muslim Farooque did not have (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