Recent technological advances shed light on virtual reality (VR) in recent months, making it an industry worth keeping a close eye on. Meta Platforms and Sony have dominated the VR space with their respective headsets for years.

But despite the stature of these companies, consumer adoption has been slow, with gamers seemingly the only group of shoppers with a strong interest in the technology. Meta has pivoted its business almost completely toward VR development and the metaverse. Yet, the company has had little success there. 

However, the sector could receive a massive boost now that Apple (AAPL -0.65%) entered the picture with its recently announced VR/AR headset, the Vision Pro. The company's history of success in new markets is immensely promising for the potential of its new headset and could spark a boom in the industry from the competition.

Tech companies looking to expand their VR departments will likely turn to chipmakers like Advanced Micro Devices (AMD 2.26%), making it another great stock to keep on your radar.

Here's a look at each of these virtual reality stocks.

1. Apple

On June 5, Apple unveiled the Vision Pro at its Worldwide Developer Conference. The headset marked the debut of a new product category for the company, something that hasn't happened since the release of the Apple Watch in 2016. 

The Vision Pro has taken a massive step forward in VR, with features never before seen in competing headsets. The device is a full-fledged computer in a headset casing, granting it all the productivity and entertainment capabilities of a MacBook. Meanwhile, it has removed the need for controllers required in headsets from Sony and Meta by utilizing eye tracking and hand gestures. 

While Apple has given a glimpse of how VR can be incorporated into one's everyday life, the Vision Pro's starting price of $3,500 makes it challenging to get the headset into the hands of the average consumer. As a result, an investment in Apple is for its long-term potential in the sector. Future iterations of the Vision Pro will likely offer more palatable pricing, a strategy the company followed with past first-generation products.

For instance, the base model Apple Watch's launch price started between $349 to $399, depending on size. These figures would equate to $430 and $490 today. Meanwhile, today's lowest-priced model comes in at $249 for the Apple Watch SE. The Vision Pro could see a similar trajectory regarding its pricing and product variations. 

The VR market is expected to hit a value of $227 billion by 2029, expanding at a compound annual growth rate of 45%, according to Fortune Business Insights. Apple's dominance in consumer tech and brand loyalty strengthens its outlook in VR and makes its stock an attractive buy as the industry blossoms. 

2. Advanced Micro Devices

Apple's Vision Pro has upped the game in VR, using the same chip as the current MacBook Air. Comparatively, Meta's Oculus Quest Pro headset uses Qualcomm's Snapdragon XR2 chip, based on the Snapdragon 865 used in premium smartphones in 2020.

As a result, Apple has essentially made its headset a full-on computer, while its biggest competitor's equivalent product has the power of a three-year-old smartphone. The discrepancy will likely motivate companies to up their game, as Apple has set a new standard for the industry.

Cue Advanced Micro Devices. AMD is a leader in custom chips, powering a number of devices across tech. The company is the exclusive supplier of graphics and processing power in Sony's PlayStation and Microsoft's Xbox Series X|S game consoles, which has boosted its gaming segment in recent years. The lucrative partnerships led AMD to provide custom chips to a growing number of handheld PC gaming devices as well, as the company becomes the go-to for such hardware.

VR headset makers like Meta will be on the hunt for more powerful chips for the next generation of their devices if they want to compete with Apple, and AMD is well-positioned as the clear choice. The company's chips are capable of running intensive VR and AR workloads, indicating it could significantly profit from the market's development. 

Moreover, AMD's price/earnings-to-growth ratio of 0.2 strengthens the argument for its stock. The figure suggests that projected growth is not priced into its shares, making it a bargain compared to its potential. And with that, AMD stock is an excellent option to invest in the swiftly growing VR market.