If one area of future technology can garner just as much or even more attention than video games, it is virtual reality. This can revolutionize communications and interaction with technology on more fronts than can easily be counted.
Now the research team at Jefferies has issued a report with virtual reality stock picks. Jefferies even titled the report “Virtual Reality Handbook: The Next Computing Platform.”
The long and short of the matter is that Jefferies views 2016 as a watershed in computing. It sees at least three Virtual Reality Platforms launching within the next 6 months.
Jefferies expects that gamers will be the early adopters, but the team believes that virtual reality will ultimately transforms business processes in many (if not most) industries. Its own analysis suggests the potential for annual unit shipments of 10 million in 3 years to 5 years, and it even sees 50 million unit shipments over a 5 year to 10 year horizon.
The long and short of the matter is that Jefferies sees these companies potentially winning in the hundreds of millions of dollars to billions of dollars.
AMD & NVIDIA
NVIDIA Corp. (NASDAQ: NVDA) and Advanced Micro Devices Inc. (NASDAQ: AMD) were listed as the near-term beneficiaries here. This should go without surprise considering that the ATI (AMD) and NVIDIA graphics cards and graphics processor units (GPUs) are winning right now – ATI/AMD in video games, and NVIDIA in PCs and other platforms.
Jefferies sees VR shipments translating to as much as $3 billion in additional sales to NVIDIA and AMD, or $750 million in additional non-GAAP operating income. Jefferies has not yet modeled any upside to its projection of $1.1 billion in operating income for NVIDIA and a loss of $180 million for AMD in 2015.