Apple’s Vision Pro Stumbles: Time to Dump These 3 VR Stocks?

Stocks to sell

Apple (NASDAQ:AAPL) may be losing momentum among VR stocks, even as tech advancements continue elevating the burgeoning sector into public consciousness. More than half of teens who own the Apple Vision Pro or similar devices rarely use them, which is a death knell for companies like Apple trying to target the next generation of tech consumers. To that end, Apple is strategically pivoting to market the Vision Pro as an ideal business/remote work tool. Priced at $3,500 and on the heels of Zuckerberg’s attempt to do the same, I’m not optimistic.

Unfortunately, Apple may be heading for a lost decade (or worse) as it continually fails to innovate tech that excites consumers. Apple’s top sellers are simply iterations of existing products, and their new initiatives (beyond just the Vision Pro) tend to disappoint or die on the vine — Apple Car, anyone?

Understandably, Vision Pro’s struggle is spooking investors bullish on VR stocks’ long-term potential. But don’t throw out the baby with the bathwater. Some decent VR stocks are still on the market, even if Apple is a stinker.

Unity Software (U)

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Down 40% this year amid wider gaming sector struggles, Unity Software (NYSE:U) will likely suffer alongside Apple – but don’t sell this stock yet (even if it isn’t worth buying quite yet).

One of Cathie Wood’s top VR stock picks, her investment thesis is compelling. She recently dropped another few million into Unity, seeing it as a company at the forefront of the metaverse, gaming and VR sectors. Unity’s unmatched potential at the intersection of these key areas positions it as a premier VR choice for enhancing a digital tech portfolio. Still, this comes on the heels of multiple layoff rounds as Unity seeks to right-size itself in today’s economic climate — hence my feeling that the stock isn’t quite a Buy today.

Unity’s unique value propositions are diverse and were highlighted in a White Brook Capital report. The analysts praised Unity’s “digital twin platform” for its distinct ability to replicate real-world objects, materials and people within a VR/metaverse context. Unlike many early-stage VR stocks, Unity generates positive cash flow through a robust advertising network. This profitability boosts Unity’s resilience against broader market uncertainties until VR stocks attract more widespread institutional interest.

Qualcomm (QCOM)

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Qualcomm (NASDAQ:QCOM) may be a major Apple partner, but the VR stock is sufficiently diversified that Apple’s ongoing woes shouldn’t have a major impact on per-share pricing. At the same time, its wider prospects make it an attractive buy, particularly at these levels.

Beyond Apple, its joint venture with Samsung and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) strengthens its hardware dominance and signals a promising future as VR markets continue to evolve.

The collaboration aims to create a comprehensive mixed-reality platform, leveraging Qualcomm’s technological expertise, Samsung’s hardware capabilities and Google’s investments in virtual reality tools. While the market awaits a definitive product announcement, industry analysts expect the partnership to produce a series of headsets that provide novel virtual reality experiences, potentially significantly increasing Qualcomm’s revenue.

Furthermore, Qualcomm is consistently enhancing its extensive array of virtual reality products, including headsets. These products, powered by Qualcomm’s Snapdragon processor, incorporate the latest WiFi technology and eye-tracking capabilities, pushing the boundaries of innovation in the VR space and establishing new industry standards.

Matterport (MTTR)

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Matterport (NASDAQ:MTTR) has been on a losing streak. Its stock has dropped 30% since January, setting it up to lose the fight within the wider VR stocks landscape.

Analysts are increasingly bearish on the stock, with the vast majority agreeing that the VR stock will underperform in 2024. Though recent initiatives, including a strategic partnership with franchising gym chain Crunch Fitness, might be a move in the right direction, Matterport has a deep hole to dig itself out of.

Matterport has faced challenges adapting to changing economic conditions that previously drove its stock up. In response, the company laid off 30% of its workforce as a cost-cutting measure. CEO RJ Pittman explained that the layoffs and other measures are intended to “sharpen our strategic focus and accelerate our path to profitability.” Pittman set forth this plan in 2023’s second quarter; thus far, his vision hasn’t been borne out for the VR stock.

On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.

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