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3 Top Stocks to Buy on Increasing Adoption of Augmented Reality

3 Top Stocks to Buy on Increasing Adoption of Augmented Reality

Posted On February 17, 2021 1:19 am
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Previously known for its applications in the entertainment and gaming industry, augmented reality (AR) has been increasing its foothold in e-commerce, retail, automotive industry, and technology segments. According to Mordor Intelligence, the global augmented reality market is expected to grow at a CAGR of 151.9% over the next six years.

The demand for AR/VR hardware with integrated augmented reality has increased significantly over the past year. Some recent applications include: The use of AR modeling and 3D visualization in surgeries, AR-powered head-up displays in vehicles, AR solutions in e-commerce as well as in-store retailing, photorealistic AR in smartphones, and 3D AR modeling in education should drive the industry’s performance post-pandemic.

Apple, Inc. (AAPL – Get Rating), Facebook, Inc. (FB – Get Rating), and Immersion Corporation (IMMR – Get Rating) are some of the top companies investing in this space. These companies should see significant revenue and earnings growth from these segments in the future.

Apple, Inc. (AAPL – Get Rating)

With a market cap of $2.27 trillion, AAPL is one of the top large-cap stocks in the world. The iPhone maker also designs, manufactures, and markets personal computers, tablets, wearables, and accessories worldwide. It also sells various related services. AAPL’s focus on AR has increased over the past few years and it is rumored that the company could launch its VR headset and AR glasses soon. The stock has gained 65.5% over the past year to close Friday’s trading session at $135.37.

It was reported by Nikkei Asia on February 10, 2021, that AAPL has partnered with Taiwan Semiconductor Manufacturing Company Ltd. (TSM) to develop micro-OLED displays, which it plans to use in its upcoming AR devices. The micro-OLED project is currently at the trial production stage. AAPL also launched its first augmented-reality app for an original Apple TV Plus series, “For All Mankind” on February 12, 2021, to promote the upcoming Season 2 premiere of the alternative-history space drama.

For the fiscal 2021 first quarter ended December 26, 2020, AAPL posted record revenue of $111.44 billion, up 21.4% year-over-year. International sales accounted for 64% of the total revenue. Net sales from the product segment have increased 21% year-over-year to $95.68 billion. Net income has increased 29.3% year-over-year to $28.76 billion and EPS has increased 34.4% year-over-year to $1.68.

A consensus EPS estimate of $0.98 for the quarter ending March 31, 2021, represents a 53.1% improvement year-over-year. Moreover, AAPL surpassed the Consensus EPS estimates in each of the trailing four quarters, which is impressive. A consensus revenue estimate of $76.97 billion for the quarter ending March 31, 2021, represents a 32% rise from the same period last year.

AAPL’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by taking into account 118 different factors with each factor weighted to an optimal degree.

AAPL has a grade of B for Momentum, Sentiment, and Quality. We have also graded AAPL for Growth, Value, and Stability. Get all of AAPL’S ratings here.

The stock is ranked #20 of 52 stocks in the Technology – Hardware industry. This industry is graded B.

Facebook, Inc. (FB – Get Rating)

Founded in 2004, FB develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. The company’s products include Facebook, Instagram, Messenger, WhatsApp, and Oculus. FB also provides Facebook Reality Labs which is an augmented and virtual reality product that helps people feel connected, anytime, and anywhere. The stock has gained 28.4% over the past year and closed Friday’s trading session at $270.50.

In September 2020 the company had announced its plans to…

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