At the culmination point, sector revenue could hit $435.36 billion. However, it’s also possible that this forecast could be understated. While mentioning VR brings up images of video games and other entertainment content, the utility goes far beyond personal amusement.
As the tech advances, VR is used for various applications: we’re talking training, civilian and military simulations and remote work, among many other solutions. There’s also plenty of overlap in the field, from the developers of VR headsets to the semiconductors that undergird the overall innovation. With that, below are the best virtual reality stocks to consider.
Meta Platforms (META)
Moving well beyond its original business as a social media network, Meta Platforms (NASDAQ:META) has become a legitimate tech juggernaut. In particular, its development of both VR hardware and immersive environments make it a leader in this exciting field. It must be said, though, that investors will be paying a premium for META stock, which trades at 8.7X trailing-year sales.
That seems like a lot because it is. However, it wasn’t too long ago that the multiple stood conspicuously higher. In the second quarter, the price-to-sales ratio stood at 9.31X on average. In Q1, the metric was even higher at 9.46X. So, an 8.7X multiple isn’t too bad. In the past year, the average print came in at 8.17X.
However, patient investors should note that by year’s end, revenue could hit $161.25 billion. If so, that would be up 19.5% from last year’s tally of $134.9 billion. Assuming a shares outstanding count of 2.18 billion, META currently trades at 6.68X projected 2024 revenue. That’s not undervalued per say but it’s a lot more attractive. Therefore, META represents one of the best virtual reality stocks.
Microsoft (MSFT)
As one of the elite tech enterprises, Microsoft (NASDAQ:MSFT) ranks among the best virtual reality stocks. The advantage for investors is that MSFT provides exposure to myriad other innovations cutting across the hardware and software spectrum. That also means that there are plenty of synergies with AI and other advanced solutions.
As you might expect, MSFT stock trades at a premium with its hot multiple of 12.17X trailing-year revenue. But thanks to the recent tech selloff, Microsoft looks awfully attractive. Keep in mind that in Q2, the company’s sales multiple averaged 14.11X. In Q1, it was slightly smaller at 13.8X. In the past year, the average stat clocked in at just under 13X.
Patient investors should consider a buy-and-hold approach with MSFT stock. That’s because in fiscal 2024, covering experts anticipate sales to hit $278.95 billion. If so, that would be up 13.8% from the prior year. And the high-side estimate calls for $287.86 billion.
Assuming a shares outstanding count of 7.43 billion, MSFT stock is trading at 10.3X projected high-side 2024 sales. That’s a more palatable print, making it one of the best virtual reality stocks to consider.
Taiwan Semiconductor (TSM)
To be sure, Taiwan Semiconductor (NYSE:TSM) – which is abbreviated as TSMC – isn’t a pure-play VR candidate. However, so much of today’s innovations require the most advanced and capable semiconductors. That’s where TSMC comes into play. Beyond that point, the company controls a large bulk of the global chip supply chain. Therefore, it makes a very reasonable candidate for best virtual reality stocks.
As with other tech players, TSM stock suffered in the recent tech fallout. In the trailing month, it lost almost 17% of equity value. However, that could present an opportunity for contrarians. Right now, the price-to-sales ratio stands at 11.7X. That’s hot in objective terms. However, in Q2, the stat shot up to 13.06X. In the past year, the average multiple landed at 9.42X.
Here’s where circumstances get more enticing. Analysts are looking at fiscal 2024 sales to hit $86.22 billion. That’s reasonable given TSMC’s enormous popularity. It wouldn’t be surprising to see the company hit the upper end of its estimate spectrum ($88.59 billion).
Assuming a shares outstanding count of 5.19 billion, TSM stock is trading at 9.36X consensus 2024 sales. That might be a steal considering the forward relevance.
On the date of publication, Josh Enomoto 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.