How to trade or invest in VR technology
VR companies offer investors and traders the opportunity to gain exposure to the growing fringe sector. From blue-chip companies with Meta Platforms to NVIDIA's heavy spending on virtual reality, find out how to get started.
What is VR technology?
When the everyday consumer thinks about virtual reality (VR), films like Minority Report, Ready Player One or Total Recall might spring to mind. However, virtual reality is no longer confined to films and games – VR tech is in everything from medicine to education, and so much more.
VR technology is used to create a simulated, computer-generated environment that takes on the appearance of reality. This makes the user feel emotionally immersed in their surroundings. This virtual environment is usually perceived through a VR headset. The setup allows the user to take on a first-person perspective in an advanced simulated setting, with no distractions. Thanks to the wide range of VR applications, you can learn to do just about anything from sports training to heart surgery.
Many get confused about the difference between virtual reality and augmented reality (AR). The key difference is that VR is fully immersive – everything you see is an artificial construct. With AR, on the other hand, the real world is the framework upon which objects or images are placed. The Pokémon Go phenomenon is a good example of AR in practice.¹
VR and AR technology has been improving quickly since the rollout of 5G internet, which powers high-speed connections on the go. In addition, AI advancements improve the 'realness' of artificial reality.
VR technology and metaverses
While related, there are many differences between VR technology and the concept of a metaverse. For one, consumers usually need VR technology to access a metaverse.
The most important difference is that when using VR technology, you're using a brand's hardware and software to experience content created by that brand. Meanwhile, in a metaverse, you personally own all the digital items held within your wallet. The idea is that you'll be able to experience multiple metaverses where many brands congregate.
How to trade or invest in VR technology
How to trade VR stocks with us
- Create a CFD trading account or log in
- Learn more about VR stocks
- Search for your VR opportunity
- Select 'buy' to go long, or 'sell' to go short
- Set your position size and manage your risk
- Open and monitor your position
When you invest in shares, you buy the stock outright. You then profit if the share price goes up or if you receive dividends. On the other hand, when you trade a share contract for difference (CFD), also known as an equity CFD, you don't own the stock – you're backing your judgement on the stock's future price. You can go long if you think the stock's value will rise, or go short if you think it'll fall.
CFD trading is leveraged, meaning you only put down a fraction of the total position size. This means you can gain or lose money much faster than you'd expect, losses could even exceed your deposit, as possible profits and losses are magnified to the full value of the trade.
When making predictions on market movements, it's useful to keep in mind that past performance isn't a guarantee of future patterns.
Learn more about the differences between trading and investing.
New to trading? Practise on a demo account to build your confidence.
How to invest in VR stocks with us
- Create a share trading account or log in
- Learn more about VR stocks
- Search for the VR stock you'd like to invest in
- Choose the number of shares you want to buy
- Open and monitor your position
VR companies
Blue-chip technology firms are investing heavily in VR – and many of these are NASDAQ-listed titans. Several virtual reality stocks are building advanced software and developing competing hardware, while others are looking at niche developments to serve a gap in the market space.
Many of these VR companies are market leaders in their sectors. One common feature is that most of the best VR companies have been aggressively acquiring promising start-ups in the space. This is considered cost-optimal compared to setting up from scratch.²
Meta Platforms
Meta Platforms is arguably one of the leading augmented reality stocks since its metaverse-focused rebrand in mid-2022. The owner of Facebook, WhatsApp and Instagram – which together boast nearly 3 billion monthly active users – has acquired multiple promising VR start-ups. Examples include Oculus in 2014, Beat Games in 2019 and Ready at Dawn in 2020.
The conglomerate is continuing to develop the Oculus VR platform, including the flagship Oculus Quest 2, a standalone consumer-ready VR headset. Meta Platforms has also invested heavily in its Reality Labs division, including the development of haptic feedback devices. These provide users with a virtual sense of touch.³
Apple
The world's most valuable company by market capitalisation (as at September 21, 2023) is also investing large sums in VR technology. It's hired multiple experts in the space, including former Oculus engineer Zeyu Li. Like Meta, it has acquired promising VR hardware-developing companies, such as Vrvana and Metaio.
Apple has filed multiple US patents related to VR advancements, including a headset eye-tracking technology that could represent a huge leap forward. The company boasts exceptionally strong brand loyalty, meaning it's more likely to be able to rely on its legions of loyal customers to buy these expensive products when they come on sale, compared to some of its competitors.
Alphabet
Alphabet – owner of both Google and YouTube – has also been on the acquisition hunt. It has bought up VR game development studio Owlchemy Labs and 3D-audio outfit Dysonics. Alphabet also partnered with Lenovo to deliver the company's patented Mirage Solo headset, which runs on the Google DayDream VR platform.
It has also done plenty of its own research. Projects include VR tools like the popular 3D painting tool Tilt Brush and developments to Google Earth that let users explore parts of the world fully in virtual reality. Perhaps its most intriguing development is Google Cardboard, which lets consumers use a low-cost VR headset made from cardboard - combined with their smartphone as the display - drastically dropping the entry costs to virtual reality.
NVIDIA
NVIDIA is one of the world's leading microchip designers and manufacturers – and is a top pick for investors considering the 'picks and shovels' approach. This investing approach involves buying shares in companies that create an underlying technology rather than the final output. The company has developed VR-specific advanced graphics processing units (GPUs) necessary for immersive experiences. It has also partnered with both Oculus and HTC to provide technology support.
The NASDAQ business has its own VR software too, including the NVIDIA VRWorks SDK developer tool and CloudXR. The latter allows users to stream VR content without needing to buy expensive hardware.
Sony
Sony's most valuable VR contribution to date has been the popular PlayStation VR headset, designed to work with its globally widespread PS4 and PS5 consoles. The company partners with several game developers to create new VR games, like the Resident Evil: Biohazard game, which was released to critical acclaim.
Like the others, Sony has gone on an acquisition spree. It swept up Insomniac Games, the creator of 'Spider-Man', an action-adventure video game. The company is also developing VR for non-gaming industries, such as education and healthcare, through its American subsidiary.
Qualcomm
Qualcomm has long been a key competitor of NVIDIA, having developed a wide range of system-on-chips (SoCs) optimised for VR applications. The chips provide the high-performance processing power required for immersive VR experiences.
Like NVIDIA, it has also partnered with Oculus and HTC to help optimise its hardware through its own Snapdragon SoCs. Plus, it boasts its own developer tool software, Snapdragon VR SDK, in addition to patented 5G technology. This allows for high-speed VR streaming without the need for a wired connection.⁴
The technological race between NVIDIA and Qualcomm has been likened to the VHS/Betamax videotape format war. Many analysts expect one company to emerge as the victor rather them sharing the market.
Microsoft
Computer titan Microsoft developed the Windows Mixed Reality VR/AR platform. It works alongside a range of affordable VR headsets sold by different manufacturers – including Acer, Lenovo, Dell, HP and Samsung.
The company has also developed its own VR software and its own VR headset hardware, providing the tools necessary for developers to create their own VR worlds. Plus, it has partnered with Halo Recruit and Superhot VR to develop a gaming suite. It has even proposing a controversial takeover of Activision Blizzard.
How to trade or invest in VR technology, summed up
- VR technology is a computer-generated simulated environment that takes on the appearance of reality, making the user feel emotionally immersed in their surroundings
- Virtual reality is almost always perceived through a specialised headset
- VR technology is an essential component of a metaverse, though there are many differences between the two concepts
- Many of the best VR stocks to watch are established blue-chip companies, which have the financial firepower to spend on the requisite research and development
- Long-term investors and short-term traders can gain exposure to VR technology stocks through our platform
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Explore the markets with our free course
Discover the range of markets and learn how they work - with IG Academy's online course.
