We recently published a list of 10 Best Augmented Reality Stocks To Buy Now. In this article, we are going to take a look at where Autodesk, Inc. (NASDAQ:ADSK) stands against other best augmented reality stocks to buy now.
According to a report by Mordor Intelligence, the global augmented reality (AR) market has a market size of $42.48 billion as of 2024. The market is expected to grow at a compound annual growth rate (CAGR) of 42.36% and reach $248.38 billion by 2029. The Asia Pacific region is expected to be the fastest-growing market, but the largest market for the domain is anticipated to be North America.
A significant portion of the market is mobile AR, which leverages the globally spread use of smartphones, tablets, and other smart devices. Estimates show that around 1.7 billion devices are capable of supporting mobile AR as of 2024. The widespread and massive existing smartphone user base lends mobile AR a key advantage.
While AR glasses such as Orion have to face steep challenges to establish themselves as a widespread global phenomenon, mobile AR benefits from “zero-cost” hardware as a majority of people around the globe already own smart devices. A well-known example is Pokémon GO, a 2016 video game where players explore their surroundings to find virtual characters on their phones. The game quickly became a global sensation due to its existing hardware: mobile phones.
Future Trends in the Augmented Reality Industry
Although the AR market is around a decade away from attaining its full potential, several technological advancements in the industry are accelerating its pace. Tech giants have been running after the dream of AR and mixed reality for years, and are investing billions of dollars in the endeavor. According to SkyQuest, the largest investment is being poured into training and industrial maintenance, with figures reaching as much as $4.1 billion in the field of AR. Apart from this, private firms, VCs, and even some governments are financing AR research institutes and teams.
The primary user base of augmented reality includes industries such as aerospace and defense, healthcare, consumer, and retail. Hospitals and other medical care startups are continually taking strides in employing immersive modalities to help healthcare professionals. With surgeons increasingly relying on AR to tackle the potential risks of healthcare procedures, the rate of errors in the industry is expected to continually fall, and so is the number of potentially unsafe surgeries. According to SkyQuest, the AR segment in the healthcare industry is expected to reach $1.2 billion by 2024.
Another expected future trend in the industry is the increased application of AR in the automotive industry. With autonomous vehicles becoming more common across the globe, the integration of AR in these vehicles is supporting the broader AR industry. Through overlaying digital data in the real world, AR technology helps improve the driver and the autonomous system’s comprehension of their environment. In addition to several other features, consumers can interact with virtual 3D models of vehicles with the help of AR technology in showrooms, allowing them to visualize several customizations.
Our Methodology
In this article, we reviewed online rankings and ETFs to determine 25 companies operating in the AR space. We then selected the 10 most popular stocks among elite hedge funds. We sourced the hedge fund data from Insider Monkey’s database, as of Q3 2024. Our focus was on companies producing AR-related hardware, software, or technologies used to develop augmented reality products. However, we also included companies that offer services essential to the AR industry, like semiconductor chips.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A software engineer using AutoCAD Civil 3D to create a 3D design in a modern office setting.
Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 70
Autodesk Inc. (NASDAQ:ADSK) offers three-dimensional design, engineering, and entertainment technology solutions for engineering, architecture, construction, product design, media, manufacturing, and entertainment industries. The company’s professional 3D software programs, like AutoCAD, allow professionals to design industry components, 3D models, and buildings.
Its CAD-to-AR for Autodesk Inventor integrates Unity Software’s game engine with the EasyAR™ augmented reality engine and is a technology demonstration of viewing Inventor 3D models in AR. Its main features enable the user to integrate it into the Inventor UI, alter model opacity in AR, capture screenshots of the AR scene, view Inventor 3D models in AR, track and choose a submodel, and undertake several other functionalities.
Autodesk Inc. (NASDAQ:ADSK) delivered 12% revenue growth in fiscal Q3 2025, reflecting the company’s sustained business momentum, successful execution of its growth strategies, and seamless implementation of its new transaction model in Western Europe after its implementation in North America. According to the company, the new transaction model forms a direct relationship between Autodesk Inc. (NASDAQ:ADSK) and its customers, with the actual transaction happening between the two only.
The model is expected to create new opportunities for Autodesk Inc. (NASDAQ:ADSK) and partners to redirect emphasis from transaction revenue sharing to value creation for customers. Once complete, the new transaction model and subsequent go to market optimization is anticipated to increase sales and marketing efficiency for the company, delivering GAAP margins among the best in the industry and positioning the company to invest in its other initiatives. The company takes the ninth spot on our list of the 10 best augmented reality stocks to buy now.
Polen Focus Growth Strategy stated the following regarding Autodesk, Inc. (NASDAQ:ADSK) in its Q2 2024 investor letter:
“Autodesk, Inc. (NASDAQ:ADSK) and Accenture were also notable absolute detractors in the quarter. With Autodesk, most of the stock’s price weakness came in April. The company announced that it would delay the release of its earnings and 10-K filing as it launches an internal investigation regarding its practices on some non-GAAP financial metrics. Upon further analysis, we were encouraged to hear that they were taking this very seriously and being very comprehensive in their investigation. Ultimately, Accenture announced it was closing the investigation and that no re-statements would be required. As discussed in the following section, we chose to exit the position in favor of a more attractive investment.
We sold our small position in Autodesk to help fund our purchase of Shopify. We still think Autodesk is an advantaged business, with 95%+ recurring revenue, dominant in its end market, and nice tailwinds behind digitization in that end market. It should be a durable grower over time, perhaps with continued fits and starts, but we found the risk-reward around Shopify to be more compelling.”
Overall, ADSK ranks 9th on our list of best augmented reality stocks to buy now. While we acknowledge the potential of augmented reality stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADSK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
