We recently published a list of the 12 Best Virtual Reality Stocks to Buy According to Analysts. In this article, we are going to take a look at where Adobe, Inc. (NASDAQ:ADBE) stands against the other best virtual reality stocks to buy according to analysts.
Overview of the Global VR Industry
Virtual Reality (VR) creates a 3D artificial environment in the real world through VR technology gadgets such as headsets, gloves, glasses, and bodysuits. According to Grand View Research, the global VR market had a market size of $59.96 billion in 2022. The industry is expected to grow at a compound annual growth rate of 27.5% between 2023 and 2030.
The VR industry has metamorphosed the entertainment and gaming sector by allowing users to engage in a simulated environment. In addition to its popularity in these sectors, another significant factor behind its anticipated growth is its use in instructional training, such as for engineers, pilots, field workers, defense personnel, mechanics, and technicians working in various industrial sectors. In addition, VR is also used in industries like healthcare and automotive due to its significant operational benefits.
VR in gaming refers to a simulated, immersive experience that manufactures an interactive 3D environment, allowing users to feel as if they are physically present in the simulated reality. This reality is generally administered through a headset that traces head movements and displays images to create a feeling of immersion. The technology also employs additional factors, such as treadmills or motion controllers, to augment the realistic and interactive mode of the experience.
According to Fortune Business Insights, the global Virtual Reality (VR) market in gaming was valued at around $17.96 billion in 2023. It is anticipated to grow at a significant compound annual growth rate of 30.4% between 2024 and 2032, going from $22.63 billion to $189.17 billion between the forecast period. North America is anticipated to be the largest market dominating the global industry, holding a share of 37.42% in 2023.
VR in gaming is increasing in popularity across the globe, with major technology companies making significant investments in developing innovative and advanced VR software and hardware. This trend is making the technology more accessible to a broader consumer base.
VR in Healthcare
According to Fortune Business Insights, the global VR in the healthcare market had a share of $3.12 billion in 2023. It is anticipated to grow at a compound annual growth rate of 35.1% between 2024 and 2032, going from $4.18 billion to $46.37 billion over the forecast period. VR in healthcare is gaining significant traction due to its immense benefits for the industry. The technology employs computer-developed mechanisms to deliver medical training to healthcare professionals and allows efficient healthcare treatments in immersive environments.
Medical professionals attain interactive, simulation-driven training, providing more efficient treatment strategies and accurate diagnoses. The technology also helps medical marketing and creates significant scope for income generation through enriched patient experiences. In addition, several major VR providers in healthcare solutions are integrating 360-degree video features and interactive 3D content to develop effective learning programs for healthcare students and professionals.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 20 virtual reality stocks. We then selected the top 12 with the highest analyst upside potential as of March 3, 2025. We also added the number of hedge fund holders for each stock as of fiscal Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of analyst upside potential as of March 7, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Adobe Inc. (ADBE) the Most Undervalued High Quality Stock to Buy According to Analysts?
A team of engineers and scientists collaborating at a workstation surrounded by their applications and solutions.
Adobe Inc. (NASDAQ:ADBE) is a US-based global technology company that offers services, products, and solutions to fuel digital and immersive experiences and imagine, manage, optimize, and engage with content across surfaces. It is a significant player in the VR industry. Its Adobe Substance 3D Modeler is a VR 3D modeling and sculpting application that allows users to create across VR and desktop. The modeler allows users to undertake a VR experience by letting them work in 3D as intuitively as working with clay in real life. It thus helps professionals and users focus on the creative process in a virtual reality instead of the technical limitations associated with real life modeling.
The company’s digital media segment, centered around Adobe Document Cloud and Adobe Creative Cloud, also offers platforms like Adobe Firefly, Adobe Express, Photoshop, and other tools for creative professionals and other consumers.
Adobe Inc. (NASDAQ:ADBE) is strengthening its product portfolio by employing AI to empower filmmakers at all levels. On January 28, the company unveiled Adobe Premiere Pro, After Effects, and Frame.io, designed to streamline workflows and target common challenges for frequent software users. The company also had a solid fiscal year 2024, reporting $21.51 billion in revenue, $8.06 billion in cash flows from operations, and $19.96 billion in RPO. It also reported revenue of $5.61 billion in fiscal Q4 2024, representing 11% year-over-year growth. Its strategy, AI innovation, and massive cross-cloud opportunity position it well for 2025 and beyond.
Polen Capital, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“We added to several existing positions in the quarter including Adobe Inc. (NASDAQ:ADBE), Workday, Shopify, MSCI, and Paycom Software. We feel Adobe is poised for re-accelerating revenue and earnings growth partially due to the monetization of its Firefly GenAI product embedded in its creative software.”
Overall, ADBE ranks 5th on our list of the best virtual reality stocks to buy according to analysts. While we acknowledge the potential of ADBE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADBE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
