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3 Augmented Reality Stocks That Could Soar as AR Goes Mainstream

Augmented reality is a powerful technology that doesn’t get nearly enough attention these days, as it’s the other “A” term — artificial intelligence — that gets more attention from investors.

As the mixed-reality headset wars play out in the background, primarily between Apple (NASDAQ:AAPL) and Meta Platforms (NASDAQ:META) — two firms that also happen to be innovating when it comes to generative AI — you can anticipate the AR scene to be an investing theme that may be next to grab the hype of disruptive tech investors.

Meta Platforms (META)

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Meta Platforms is coming off of its year of AI-driven efficiency. Undoubtedly, the company’s plan to trim costs and turn the tide has worked out in a big way. Just have a look at how explosive the stock has been since shares bottomed back in fall of 2022.

Since then, it seems many of Meta’s high-tech peers have been embracing a similar game plan by cutting costs without sacrificing their ability to drive innovation forward. Notably, AI has played a major role in helping breathe new life into the ad business.

As the world inches closer to a mixed-reality future, look for Meta to leverage AI to be dominant on the front of AR ads. Only time will tell whether AR smart glasses like Orion will be a hit or miss. Regardless, Meta stock still seems like an AR play that stands to benefit a great deal from AR’s steady move into the mainstream.

Apple (AAPL)

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Apple just launched its mixed-reality headset Vision Pro model this year. Though early sales estimates surpassed expectations, it seems like most investors have moved on. Why? As profitability goes, it doesn’t really matter that the Vision Pro sold more units in the United Stateas than expected. The difference represents a mere drop in the bucket of Apple’s overall revenues.

Still, there’s a good chance investors may be discounting the new device’s future prospects, specifically its potential to contribute to revenues over the next 10 years and beyond. Additionally, the Vision Pro could be in a spot to thrive as it expands beyond just the U.S. markets.

It will take a while — perhaps a long while — before AR tech goes mainstream. In any case, it’s inevitable that the number of technology offerings from AR will grow with time. With that, Apple is a must-watch AR play for those with a horizon in excess of five years.

Snap (SNAP)

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Snap (NYSE:SNAP) is a social-media stock that has struggled to sustain traction after crumbling in late 2021 and most of 2022. At $11 and change, the firm needs to focus on its next steps if it’s going to get its stock back on the ascent.

The company’s recent revenue miss and soft guide seemed to put an end to any rally hopes for upside seekers. In any case, Snap is still a credible player in AR. If and when AR does go mainstream, Snap may have an opportunity to gain market share again.

The company has been quietly building an AR creator ecosystem named Lens Studio, with the latest 5.0 version currently still in beta. Combined with AI-powered AR experiences, it’s clear that Snap can’t wait for the AR age to take hold.

For now, however, investors will have to be patient, as it could take many years for Snap’s snapback to happen, if at all.

On the date of publication, Joey Frenette owned shares of Apple. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.

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