How to trade VR technology
VR technology companies offer traders an excellent opportunity to profit from the growing fringe sector. From blue-chip companies with Meta Platforms to NVIDIA's heavy spending on virtual reality, find out where 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.
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 VR, you can learn to do things as advanced as sports training or 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. Within 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 tech have 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 tech and the concept of a metaverse. For one, consumers usually need VR tech to access a metaverse.
The most important difference is that when using VR tech, 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.
Further, VR tech is a well-understood technology, while metaverses are still a developing concept. If you'd like to find out more, we have an excellent rundown of the leading metaverse stocks.
How to trade on VR stocks with us
- Create an account or log in
- Trade CFDs, then search for your VR opportunity
- Select 'buy' to go long, or 'sell' to go short
- Set your position size and take steps to manage your risk
- Open and monitor your position
When you trade shares, you don't own them – you are backing your judgement on the future share price. You can go long if you think the stock will rise, or go short if you think it will fall. Investing and share dealing are not available on our platform.
Trading with CFDs 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, and losses could exceed your deposit.
You can learn more about the differences between trading and investing here.
VR companies
Blue-chip tech firms are investing heavily in VR technology – 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 own sectors, allowing traders to benefit from their research in VR tech without taking on elevated risk. 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 with huge processing power. 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 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 can rely on its legions of loyal customers to buy these expensive products when they come on sale – unlike some competitors.
Alphabet
Alphabet – owner of both Google and YouTube – has also been on the acquisition hunt. It's 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's 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. Consumers can 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 'pick and shovel' 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 tech 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 Spiderman: Far from Home. 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 tech. 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 than share 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, like the Microsoft HoloLens, and its own VR headset hardware, providing the tools necessary for developers to create their own VR worlds. Plus, it's partnered with Halo Recruit and Superhot VR to develop a gaming suite. It's 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 tech is an essential component of the metaverse, though there are many differences between the two concepts
- Many of the best VR stocks are low-risk blue-chip companies, which have the financial firepower to spend on the requisite research and development
- Short-term traders can benefit from the advance of VR tech stocks through our award-winning platform
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Explore the markets with our free course
Discover the range of markets you can trade on - and learn how they work - with IG Academy's online course.
