Virtual Reality Stocks: Skip Facebook, Buy This Stock Instead
Facebook (NASDAQ: FB) has taken an early lead in the virtual reality (VR) industry, and we're unlikely to see anyone catch the company in the next year or two when it comes to headsets. The Oculus Quest 2 has become the most popular headset in the industry, with estimates as high as 5 million units sold since launching in mid-2020, although the company doesn't break out volume. We do know that Facebook's non-ad revenue jumped from $297 million in the first quarter of 2020 to $732 million in the first quarter of 2021 on the back of Quest 2 sales, so this is a high growth business.
The bet for Facebook is that "owning" the hardware for VR and eventually augmented reality (AR) will give the company a leg up in the next computing platform and continue its run as a high growth stock. It's effectively trying to be like Apple (NASDAQ: AAPL) is in smartphones.
But Facebook may not be building the most valuable components and software in VR today. I argue that Unity Software (NYSE: U) is actually going to fill that role and that may mean Facebook's position is less like Apple's in smartphones and more like Motorola or Samsung, hardware makers that generate far less value per device than Apple.
Source Fool.com
