The market just went wild with Apple’s introduction of its new product “Vision Pro” which has set most tech enthusiasts on the edge of their seats with the mixed reality headset. The Vision Pro is a virtual and augmented reality device that projects digital images on top of real-world settings. It has been in the works for years, and its recent unveiling hinted next year as its launch. While Apple refers to it as a “spatial computer,” it is, in reality, a very high-end and sophisticated headset that is priced at $3,499.
Apple is a tech giant and has always made waves in marketing its products. For example, they eliminated the 3.5mm headphone jack and removed chargers for their brand-new gadgets. These strategies were first frowned upon by the market but were later adopted by other competitors, which proves Apple is one of the leaders and trendsetters in tech. The question that lies in most tech enthusiasts right now is, will this be the first step into AR and VR boom?
What is Augmented Reality and Virtual Reality?
Thanks to continuous technological innovation, companies compete to develop different ways of enhancing their user's experience - and way of life. Some of the technologies that were made are Augmented Reality and Virtual Reality.
Augmented reality
A technology that provides an interactive experience combining the real world and computer-generated content. This content can span multiple sensory modalities, including visual, auditory, haptic, somatosensory, and olfactory. Some of the notable augmented reality applications in recent times has been the smash hit Pokemon GO.
Virtual Reality
A technology that provides a simulated experience that employs pose tracking and a 3D near-eye display that gives users an immersive feel in the confines of a virtual world. Virtual reality has seen different applications in the real world, such as in architecture designs, education, the automotive industry, healthcare, etc.
What is the future of both AR and VR?
According to a report from Radiant Vision Systems, AR and VR are forecasted to grow by $50.90 billion in 2026 with a five-year compound growth rate of 32.2% - for applications in retail, healthcare, and gaming standing to benefit the most. Analysts expect that with the increased adoption of new tech, we are closer to having access to AR and VR in our daily lives.
3 AR and VR-related companies to watch
With Apple’s introduction of its mixed reality headset, it's safe to say that there may be pockets of opportunities that investors can take part in a potential boom in consumer adoption of AR and VR. Let’s look at 3 buy-rated companies that are currently involved in AR and VR.
Kopin Cp (KOPN)
Kopin Corporation is a company that develops and provides displays and optical technologies that are critical components of different products that have military, industrial, and consumer applications. The company’s application-specific optical solutions comprise high-resolution, micro display subassemblies related components. The products are used for soldiers, armored vehicles, avionics, and training and simulation defense applications. They are also used in industrial applications, public safety, and medical headsets; three-dimensional (3D) optical inspection systems, virtual reality (VR) wearable headsets systems, and consumer augmented reality (AR). The company’s various display technologies also provide different applications for their customers, such as:
Micro inorganic light emitting diode (MicroLED)
- Organic light emitting diode (OLED)
- Liquid crystal on silicon (LCOS)
- Active-matrix liquid crystal displays (AMLCDs)
Analyst Ratings
Analysts rate KOPN a Strong Buy - based on 3 Strong Buy recommendations. The target price for KOPN is $3.00, suggesting an upside of 57.89%.
Universal Display (OLED)
Universal Display Corporation is a company that researches, develops, and commercializes organic light-emitting diode (OLED) technologies and materials for use in various applications, which include in-display and solid-state lighting. OLED displays are being used in mobile phones, wearables, television, tablet, notebook, personal computer, virtual reality (VR), portable media devices, augmented reality (AR), and automotive products. The company’s PHOLED technologies allow OLEDs to emit light through phosphorescence. The company owns an intellectual property portfolio surrounding its existing PHOLED technologies and covers materials for both displays and lighting products. The Company markets it under the UniversalPHOLED brand. The Company also has additional OLED technologies like:
- FOLED - Flexible OLEDs
- OVJP - Organic Vapor Jet Printing
Analyst Ratings
Analysts rate AXON as a Strong Buy based on 8 Strong buys and 2 moderate buys recommendations from analysts. The mean target price for AXON is $240.30, and a high target price of $263.00, an upside of 34.95%
Unity Software Inc. (U)
Unity Software Inc. (Unity) is a company that provides a platform for content creators that allows the use of real-time three-dimensional (RT3D) development tools and services. This allows their users to create interactive, two-dimensional (2D), augmented reality, 3D, and virtual reality experiences across all major platforms and device endpoints. The Company has two complementary and interconnected solutions:
- Create Solutions - provides tools for developing real-time 2D and 3D content used by designers, artists, and developers across different industries.
- Grow Solutions - allows customers to engage in their user base to monetize their content and expand their users across different industries.
Analyst Ratings
Analysts rate Unity Software as a Moderate Buy based on 6 Strong Buys, 1 Moderate Buy, 6 Holds, 1 Moderate Sell, and 1 Strong Sell recommendation. The mean target price for Unity is $39.64, and a high target of $70.00, a potential upside of 95.31%.
Final Thoughts
New tech has always brought excitement into investment as investors and speculators aim to find the next best stock to profit from the new trend. As investors, it is important to conduct due diligence to ensure a better understanding of the business and the implementation of its products. As innovation breeds new sets of winners, this also has its own sets of losers.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
