5 Best Augmented Reality Stocks to Invest In

In this article, we discuss 5 best augmented reality stocks to invest in. If you want to see more stocks in this selection, check out 12 Best Augmented Reality Stocks to Invest In. 

5. The Glimpse Group, Inc. (NASDAQ:VRAR)

Number of Hedge Fund Holders: N/A

The Glimpse Group, Inc. (NASDAQ:VRAR) is a New York-based virtual reality (VR) and augmented reality (AR) platform company, providing enterprise software, services, and solutions in the United States. The company’s AR/VR solutions are used in higher education learning, corporate training, financial services, media and entertainment, architecture, engineering, construction, and government applications. The Glimpse Group, Inc. (NASDAQ:VRAR) reported a Q3 2022 revenue of $3.86 million. It is one of the best augmented reality stocks to consider. 

4. QUALCOMM Incorporated (NASDAQ:QCOM)

Number of Hedge Fund Holders: 80

QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based company engaged in the development and commercialization of foundational technologies for the wireless industry worldwide. The company offers Snapdragon AR technology, which is the next generation of mobile computing, merging the real world with virtual objects for a seamless digital experience. QUALCOMM Incorporated (NASDAQ:QCOM) is one of the best augmented reality stocks to invest in. 

On November 16, QUALCOMM Incorporated (NASDAQ:QCOM) disclosed its first augmented reality platform for glasses, Snapdragon AR2 Gen 1. The new platform uses 50% less power and two and half times the artificial intelligence performance of its XR2 Gen 1 platform, which will enable the glasses to use less than 1 watt of power.

Credit Suisse analyst Chris Caso on November 15 initiated coverage of QUALCOMM Incorporated (NASDAQ:QCOM) with an Outperform rating and a $150 price target. The company has near-term, intermediate-term, and longer-term catalysts for share gains, the analyst told investors. 

Among the hedge funds tracked by Insider Monkey, QUALCOMM Incorporated (NASDAQ:QCOM) was part of 80 public stock portfolios at the end of September 2022, compared to 71 in the prior quarter. David Goel and Paul Ferri’s Matrix Capital Management is a prominent stakeholder of the company, with 3.3 million shares worth $377 million. 

In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and QUALCOMM Incorporated (NASDAQ:QCOM) was one of them. Here is what the fund said:

“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker QUALCOMM Incorporated (NASDAQ:QCOM), which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”

3. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 89

NVIDIA Corporation (NASDAQ:NVDA) is a California-based company specializing in graphics, computing, semiconductors, and networking solutions. NVIDIA CloudXR, a next-gen innovation built on NVIDIA RTX technology, delivers VR and AR across 5G and Wi-Fi networks. NVIDIA Corporation (NASDAQ:NVDA) is one of the premier augmented reality stocks to buy now. 

Needham analyst Rajvindra Gill on November 17 raised the price target on NVIDIA Corporation (NASDAQ:NVDA) to $200 from $155 and maintained a Buy rating on the shares. The company’s Q3 results were “solid” with data center revenue outlook slightly higher despite soft China data center sales, the analyst told investors. He added that while China still weighs on overall results, NVIDIA Corporation (NASDAQ:NVDA) is executing well in the face of these headwinds.

According to Insider Monkey’s Q3 data, 89 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), compared to 84 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is a significant position holder in the company, with 12.10 million shares worth about $1.5 billion. 

Vulcan Value Partners made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2022 investor letter:

“We also sold NVIDIA Corporation (NASDAQ:NVDA) during the quarter to allocate capital to new purchases and to add to existing positions in the portfolio. NVIDIA is facing multiple headwinds. Data center revenue growth is slowing, gaming revenue growth is declining, and the United States has issued new export controls to China that impact NVDIA’s products. We believe NVDIA’s competitive advantages are intact, and it remains on our MVP list. In the right circumstances we would be delighted to own it in the future.”

2. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 140

Apple Inc. (NASDAQ:AAPL) is one of the best augmented reality stocks to consider. The company is reportedly set to enter the augmented and virtual reality world by launching an AR/VR standalone headset and AR glasses for daily wear. The headset will have an operating system known as xrOS, which suggests that it will incorporate both augmented reality and virtual reality technologies. These products could be launched by 2025. 

On December 2, Morgan Stanley analyst Erik Woodring maintained a $175 price target and an Overweight rating on Apple Inc. (NASDAQ:AAPL) shares, citing December quarter AppStore forecast as ‘conservative’. 

According to the third quarter database of Insider Monkey, 140 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), compared to 128 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company, with approximately 895 million shares worth $123.6 billion. 

Here is what Wedgewood Partners specifically said about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”

1. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 156

Alphabet Inc. (NASDAQ:GOOG) announced in May 2022 its new AR glasses, which will rival the efforts from Meta Platforms and Apple, who are developing similar products. Alphabet Inc. (NASDAQ:GOOG) is one of the best augmented reality stocks to invest in. 

On November 30, Societe Generale analyst Christophe Cherblanc maintained a Buy recommendation on Alphabet Inc. (NASDAQ:GOOG) but trimmed the price target on the shares to $132 from $147. The analyst said cost management has become a top priority for technology investors. For Alphabet Inc. (NASDAQ:GOOG), the issue is less about near-term cyclical pressures than delivering the scale benefits expected from a company with revenues of $280 billion in a “progressively maturing online ecosystem,” the analyst told investors. He said Alphabet Inc. (NASDAQ:GOOG) remains his preferred online stock despite the slashed estimates.

According to Insider Monkey’s data, 156 hedge funds were long Alphabet Inc. (NASDAQ:GOOG) at the end of September 2022, compared to 153 funds in the earlier quarter. Chris Hohn’s TCI Fund Management is the largest position holder in the company, with 52.4 million shares worth $5 billion. 

Here is what Mayar Capital had to say about Alphabet Inc. (NASDAQ:GOOG) in its third-quarter 2022 investor letter:

“In early January this year – which admittedly feels like eons ago – US President Joe Biden was pushing Americans to take up the government’s offer of free COVID tests to help tackle the surging omicron variant. How did Biden respond when citizens asked about the availability of these tests?

“Google it!”

This advice, undoubtedly well-meant, was roundly scoffed at by the press, however. It seemed too obvious to be very helpful.

Anyway, the anecdote serves to introduce you to one of our largest holdings, Alphabet; the parent company of Google. Note that first, Alphabet’s original and core product – its search engine – has entered our common vocabulary as a verb. ‘Googling’ something has the same meaning as ‘researching’ or ‘finding an answer to’ something. Second, the reason Biden’s advice was met with such opprobrium was because Googling something has become almost second nature to us now.

These two observations reveal a lot about Google’s strength in the search engine market, in which it has a share of over 90 percent. Because internet search is almost the prototypical network, Google has benefitted from – and we think is also protected by – the huge competitive advantage its scale brings – both to those asking the questions and those providing the answers. The Google search platform becomes increasingly useful to anyone seeking information as a greater volume of stuff becomes available. This starts a virtuous cycle that results in a colossal market share for Google itself. In the language of business strategists, Google benefits from vast network effects.

Because Google’s search results are viewed by billions of eyeballs every day, its search page ‘real estate’ is understandably very valuable to those with goods and services to sell. Advertising revenues from this ‘real estate’ as well as that from its other properties such as Mail, Maps, and so on, totaled almost USD 150b in 2021; amounting to almost 58% of the company’s revenues. Ad sales on YouTube, also owned by Alphabet, brought in another USD 28b. With the secular shift of the advertising spend to digital channels – over which Alphabet has a tight grip – we estimate the company has a share of around 40% of the digital advertising market and is probably the most valuable advertising property in the world…” (Click here to see the full text)

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