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Spatial Computing Emerging as a Tech Buzzword: 5 Stocks to Play

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Disruptive innovation in technology is making way in the world, with spatial computing covering the combined capabilities of global positioning system (GPS), artificial intelligence (AI), Internet of things (IoT), machine learning (ML), remote sensing and more. Spatial computing brings together the physical and digital worlds. From booking a ride on Uber to doctors performing complicated surgeries, this umbrella concept offers a wide array of technologies that are poised to grow.

Human-Machine Interaction: A Key Driver

One of the key features of spatial computing is that it uses the 3D space around an object to interface with technology, creating a two-way relationship, connecting man and machine. For instance, one can use a smart speaker for voice-automated Internet searching and also direct their cleaning robots. Spatial computing also helps shoppers create a virtual copy of their rooms and see how furniture will look before purchasing it.

Applications combined with wearable technologies now help one monitor heart rate, pulse, blood pressure and body temperature. These devices are not only handy for athletes but also help common man track their general wellbeing in day-to-day lives. Additionally, when spatial computing is deployed on the factory floor, it enables seamless interactions between employees through augmented reality (AR). The company can keep a close watch on performance management, improve ML capabilities, and optimize design and factory floor operations.

Gaming, Medicine and Beyond

The gaming space has been booming in the past year and much of its advancement can be credited to spatial computing. Augmented reality is enhancing the gaming and entertainment experience rapidly. Spatial computing’s dependence on 3D imaging techniques allows players to immerse in the virtual world and perform physical activities. The market already has several AR/VR headsets or glasses-free holographic displays like Magic Leap, HTC Vive and Oculus.

In the field of medicine and healthcare, 3D printing has the potential to transform the manufacturing landscape. Medical breakthroughs like 3D bioprinting can now create tissues that are both spatially patterned and three-dimensional. Hence, a 3Dprinted human liver is no longer a myth. Spatial computing is also making transportation faster, cheaper and more convenient.

Another application of spatial computing can be seen in agriculture, with farmers now being able to use precision agriculture to control the way crops are produced. Drones and bots can now survey land quality, climate and suggest farmers how to control the number of chemicals used on crops.

Spatial Computing Market Growth Pointers

As mentioned earlier, spatial computing is an umbrella concept for various technologies and has found application in nearly every sector of human life. Its scope to enhance the quality of life, from daily household tasks to reducing traffic accidents, weather forecasting to security, makes it an area of growth and holds potential for investors to earn hefty returns.

According to Zion Market Research’s report, the global spatial computing market, which was estimated at $22.22 billion in 2019, is likely to see a  CAGR of nearly 41% to $196.21 billion by 2026.

5 Top Picks

Given spatial computing’s scope for innovative improvement, we have shortlisted five stocks that are poised to grow.

Sony Group Corporation (SONY - Free Report) designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets. VR gaming has been a highlight of the company with its PlayStation VR headset. The Spatial Reality Display enables creators across automotive and industrial design, to Computer Graphics (CG) and Visual Effects (VFX) designers and creators in film to bring ideas to life in 3D displays.

The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Audio Video Production industry’s projected earnings growth of 19.3%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 5.6% upward over the past 60 days. Sony flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA Corporation (NVDA - Free Report) operates as a visual computing company. The company offers graphics processing units that developers need to bring virtual worlds to life. Nvidia also provides drivers that can be used in all major headset brands, including Oculus, Valve Index and HTC Vive.

The company’s expected earnings growth rate for the current year is 33.7% compared with the Zacks Semiconductor - General industry’s projected earnings growth of 18.4%. The Zacks Consensus Estimate for this Zacks Rank #1 company’s current-year earnings has been revised 15.1% upward over the past 60 days. 

Microsoft Corporation (MSFT - Free Report) develops, licenses and supports software, services, devices, and solutions. The company is engaged in spatial computing and offers virtual reality-based products like DreamWalker that allow users to walk from one place to another in the real world while experiencing a completely different place.

The company’s expected earnings growth rate for the current year is nearly 28% compared with the Zacks Computer - Software industry’s projected earnings growth of 2.1%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 0.4% upward over the past 60 days. Microsoft holds a Zacks Rank #2 (Buy).

Alphabet Inc. (GOOGL - Free Report) offers performance and brand advertising services and more. The company has been focusing on opportunities to bring more spatial computing to the masses, one of its widely used services being Google Maps. Meanwhile, Google’s ARCore includes light detection, surface and edge detection, and six degrees of freedom in user motion.

The company’s expected earnings growth rate for the current year is 18.2% compared with the Zacks Internet - Services industry’s projected earnings growth of 7.2%. The Zacks Consensus Estimate for this Zacks Rank #2 company’s current-year earnings has been revised 0.3% upward over the past 60 days.

Deere & Company (DE - Free Report) manufactures and distributes various equipment. The company uses virtual reality to visualize tractors early in the design process, which in return shortens the time from concept to production. Deere is also using AI, ML, and computer vision applications in agriculture that can increase yields, reduce costs, and boost sustainability.

The company’s expected earnings growth rate for the current year is 82.5% compared with the Zacks Manufacturing - Farm Equipment industry’s projected earnings growth of 17.6%. The Zacks Consensus Estimate for this Zacks Rank #2 company’s current-year earnings has been revised 20.5% upward over the past 60 days. 

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