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Advanced Micro Devices (AMD -0.71%) has seen its stock pop 160% this year, and there's good reason for that. Investors are benefiting from the company's recent release of new graphics processors, anticipation for its Zen PC processor, and the likelihood of its designs winning placement in Microsoft and Sony's next consoles.  

Many investors are also banking on AMD's new graphics cards, like the powerful Radeon RX 480, to propel the company further into the virtual reality hardware space. The RX 480 is an ideal candidate for high-end VR headsets, and it costs just $200.

That low price, mixed with the current growth of VR, could give AMD a strong position in the VR hardware market, which IDC forecasts will have a 183% compound annual growth rate between now and 2020.

But if investors like AMD as a VR play, I think there are two better buys that they should consider: NVIDIA (NVDA -3.02%) and Alphabet (GOOG 0.23%) (GOOGL 0.13%)

Why NVIDIA is a better buy

NVIDIA is, of course, AMD's biggest rival. Between them, the companies enjoy a GPU duopoly, with NVIDIA taking about 66% of the discrete GPU market, and AMD picking up the rest. 

And it's NVIDIA's dominance in GPUs that gives it the clear advantage. The company just released three new notebook graphics cards that add VR-ready capability to notebooks  -- not an easy feat. The company says the cards' processing capabilities come within 10% of those of their desktop computer counterparts.

Most VR-capable PCs are already using NVIDIA's processors, but the company is looking to expand that advantage even further. Jason Paul, the general manager of NVIDIA's Shield, gaming and VR business, recently told Barron's that its GPUs are starting to be used in powerful server computers -- and that those could eventually power virtual reality from the cloud.  

That's worth noting, because as VR grows, it'll become harder for PC's graphics cards (particularly the ones made for notebooks) to keep up with its intense processing demands. Cloud servers could be the answer, and NVIDIA is already making huge strides in the space with its DXG-1 supercomputer

VR aside, NVIDA's stock has popped nearly 87% this year thanks to the company's ongoing moves into new markets like driverless cars and machine learning. When it comes to an overall GPU play with a VR-focus, there's no company better than NVIDIA right now.  

Why Google is a better buy

I'll admit, it's a bit strange comparing AMD to Google. But both are making their own VR plays, and I think Google is the better investment.

According to Bloomberg, the company is about to launch its new Daydream virtual reality platform and content hub. Daydream will bring VR-focused apps, games, and videos all to one location for mobile devices. 

Bloomberg said that it could become the "dominant way people engage with virtual reality" just as Android became the dominant way people engage with smartphones.

Already the company is paying up to hundreds of thousands of dollars apiece for some individual pieces of original VR content for Daydream, and is also partnering with HBO, Hulu, Ubisoft, and the MLB and NBA to launch content on the platform. 

The opportunity for Google is that Daydream could become the place to access VR content on mobile devices (or, at least, Android ones). There is no VR content hub like this right now. Instead of having content creators or hardware makers fight over an online content distribution network, it makes much more sense to let Google bring them all together. And it's the main reason why I think Google could be the biggest VR winner this year.

The bottom line

AMD isn't a bad investment by any means, and its new lineup of graphics cards should keep it a formidable opponent to NVIDIA. But if investors are looking for companies that have distinct VR advantages, Google and NVIDIA are their best bets.