Steering clear of the tech giants that dominate the headlines, the stock market holds a treasure trove of hidden-gem VR stocks primed for discovery. In the ever-evolving investment landscape, the burgeoning interest in VR has captured the attention of astute investors. In 2023, both the VR market and AI soared to unprecedented popularity, paving the way for numerous success stories across both domains.
As per Grand View Research, the global VR market reached a valuation of $59.96 billion in 2022, with forecasts indicating substantial growth on the horizon. Projections estimate the market to achieve a staggering $435.6 billion in sales by 2030, boasting a remarkable 27.5% Compound Annual Growth Rate (CAGR) from 2023 to the end of the forecast period. These figures represent an immense total addressable market for hidden-gem virtual reality stocks in 2024.
Now, let’s delve into three hidden gems within the virtual reality stocks landscape, unraveling the factors propelling their ascent.
Matterport (MTTR)
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Matterport (NASDAQ:MTTR) stands out as the premier spatial data company, allowing users to digitize buildings and create immersive 3D tours. Financially, the company has been excelling, reporting robust results in the third quarter of 2023, with a 7% year-over-year revenue increase to $40.6 million. Notably, its subscription model hit a record high at $22.9 million, reflecting a remarkable 20% annual growth.
During the same quarter, Matterport launched an AI-powered real estate program in beta, automating room measurements and layouts through millions of 3D data points. This strategic move significantly reduces manual efforts and positions MTTR as an innovator in the VR stocks landscape.
A recent milestone was the adoption of Matterport’s 3D Property Marketing solution by The Ivy Collection, a leading U.K. restaurant brand. This strategic partnership enables The Ivy Collection to virtually showcase private dining spaces, streamlining event planning and enhancing customer satisfaction, contributing to Matterport’s expanding list of collaborations.
Unity Software (U)
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Unity Software (NYSE:U) takes the spotlight as a leading provider in the 3D content creation sphere, offering interactive and real-time solutions. Despite recent market fluctuations, the company’s decisive move to reduce its workforce by about 25% signifies a concerted effort toward sustainable profitability.
In its third-quarter financial report, Unity Software illustrates an impressive narrative, boasting a remarkable 69% year-over-year surge in sales, totaling a noteworthy $544 million. The Create Solutions segment reported $189 million in revenue, with subscriptions marking a robust 19% increase. Equally noteworthy is the outstanding performance of the Grow Solutions segment, which experienced an exceptional 166% year-over-year growth, achieving a revenue milestone of $355 million.
What sets Unity apart is its versatile Virtual Reality (VR) software, empowering developers to craft immersive experiences compatible with various platforms such as SteamVR, Meta Quest, and Playstation VR. This flexibility streamlines the development process, cementing Unity Software’s position as a lucrative choice for creators.
Roblox (RBLX)
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Roblox (NYSE:RBLX), initially an online game platform, smoothly transitioned into the realm of virtual reality experiences, marking an impressive 22.92% year-over-year growth in its stock price.
Roblox recently unveiled robust fourth-quarter results. Despite reporting GAAP earnings per share of negative 52 cents, the company surpassed estimates by three cents. Bookings experienced a substantial 25.6% year-over-year increase, reaching $1.13 billion and surpassing forecasts by $50 million. Moreover, revenue soared to $749.9 million, reflecting a significant 30% growth last year. Looking ahead, management’s upbeat first-quarter 2024 revenue guidance of $755 million to $780 million signals sustained growth momentum.
Beyond financial prowess, the recent launch of an AI-powered “unified translation model” stands out, enabling real-time conversations and overcoming language barriers for players. Additionally, Roblox’s expansion to the Meta Quest VR headset and Sony Playstation underscores its commitment to capitalizing on the Metaverse trend. This diversification enhances Roblox’s accessibility and aligns with the company’s forward-thinking approach to digital community development, positioning it as one of the hidden-gem VR stocks.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
