As computing and display technology continues to relentlessly advance, it seems inevitable that the virtual-reality and augmented-reality industries will benefit. In fact, research firm Digi-Capital estimates that the combined augmented and virtual reality space will grow to represent a $120 billion market by 2020, up from less than $5 billion this year. 

But finding the best virtual-reality stocks to profit along the way is easier said than done, especially as the price of many of those stocks already reflects much of that growth potential. To help get you started, then, here are three beaten-up virtual-reality stocks to consider adding to your portfolio.

Lights, camera ...

First, GoPro (NASDAQ:GPRO) is striving to expand the scope of its business to play a key role enabling the rise of virtual reality through media capture and software services.

GoPro's OMNI VR rig. Image source: GoPro,

More specifically, GoPro offers compelling virtual-reality hardware rigs such as Omni, a synchronized six-camera spherical array that allows each camera to act as one. And to help optimize those spherical videos, last year GoPro acquired Kolor, a leader in virtual reality and spherical media software solutions. Under GoPro's umbrella, Kolor's software enables users to combine multiple images or videos to produce high-res panoramic or spherical content, which can then be displayed on mobile devices, on web browsers, or in virtual-reality environments.

As it stands, however, GoPro still derives the bulk of its revenue from sales of its core action-camera devices. And shares of GoPro are down nearly 70% over the past year as of this writing, as demand for those cameras has waned.

It doesn't help that GoPro's highest-end HERO4 Black and Silver cameras were introduced nearly two years ago. And the company botched last year's release of its (now) more affordable HERO4 Session model by introducing the compact camera at too nhigh a price point, only to subsequently drop its price by $100 two times in five months to its current MSRP of $199. 

But as of GoPro's second-quarter 2016 report last month, the company was still on track to launch both its new HERO5 series cameras and its new Karma quadcopter in time for the lucrative holiday season, which will mark what GoPro's founding CEO, Nick Woodman, describes as the "largest introduction of products in our history." If GoPro is able to follow through on that launch, it could be exactly what the company needs to once again start delivering sustained, profitable growth.

Moving higher with VR chips

Next, no virtual- or augmented-reality platform would be complete without a decent motion-sensing chip to enable the experience. That's where InvenSense (NYSE:INVN) comes into play.

Image source: InvenSense

As it stands, shares of InvenSense are down around 30% year to date on softness in the mobile market. But that decline would have been even worse if an analyst upgrade hadn't sent shares of InvenSense soaring a few weeks ago. Incidentally, that analyst -- Pacific Crest's John Vinh -- singled out the "significant opportunity" InvenSense's chips have to further penetrate the market for entry-level and mid-tier devices, many of which don't include high-quality gyroscope chips required for their users to enjoy augmented-reality platforms and games. One prominent recent example Vinh mentioned is the unprecedented popularity of augmented-reality game Pokemon Go.

That sentiment also echoed the thoughts of InvenSense CEO Behrooz Abdi two weeks earlier, when he stated, "Given strong consumer demand, we expect to see the emergence of many more augmented reality applications and games beyond Pokémon Go, and we believe that their proliferation in mobile devices will expand our TAMs to be mid-tier and low-tier smartphone markets for high-performance gyro."

Indeed, as virtual and augmented reality continue to become more ubiquitous, InvenSense should be better off for it.

Put market-beating returns on display

Finally, consider organic LED (OLED) technologist Universal Display (NASDAQ:OLED), shares of which are technically up more than 60% over the past year but also trade more than 20% below their 52-week-high as of this writing, thanks to the company's weaker-than-expected second-quarter 2016 report earlier this month. 

Image source: Universal Display

But as I wrote shortly after that report, our market was recoiling after Universal Display management told investors there would be a roughly six-month delay in UDC's expected ramp in revenue growth -- which isn't entirely surprising, given the number of variables underlying that growth in these early stages of the OLED industry. To blame, UDC says, were delays in the adoption of new higher-margin OLED emitter materials and customers' more efficient use of OLED materials ahead of their own impending ramps in OLED manufacturing capacity. But over the longer term, Univeral Display should still realize that growth, even if it takes more time than expected.

More pertinent to our topic, Universal Display is poised to benefit from virtual reality as its flagship phosphorescent OLED materials enable displays that are more compact, can be made flexible and even semi-transparent, and sport richer colors and deeper blacks than any competing display technology can offer. All of these features make OLED displays ideally suited to creating more immersive virtual- and augmented-reality solutions.

For patient investors willing to watch Universal Display's long-term story continue to unfold, I think the pullback represents a perfect opportunity to open or add to a position.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.