Many companies have dabbled in virtual reality (VR) over the years, releasing various headsets and using different strategies in an effort to convince consumers to adopt the technology. Meta and Sony recently dominated the industry with their respective devices. Yet even these tech giants have been unable to achieve much success in the market, as consumers seem unconvinced by the utility of VR. 

However, technological advances and the entrance of new companies into the market have renewed interest in VR. Data from Fortune Business Insights shows the virtual reality market is projected to expand at a compound annual growth rate of 45% through 2029, hitting $227 billion. As a result, the industry makes for an exciting and potentially lucrative investment opportunity. 

Here are two stocks to invest in virtual reality this August.

1. Apple

Filed patents and various acquisitions over the years all but confirmed Apple's (AAPL -1.62%) plans to venture into virtual reality. However, the speculation finally became a reality at the company's Worldwide Developer Conference this past June when it unveiled its first-ever headset, the Vision Pro. 

The new device appeared to take leaps in innovation, offering features never before seen in competing headsets. The Vision Pro is expected to launch in 2024 and will offer both VR and augmented reality (AR) capabilities.

The device utilizes the same chip currently in the MacBook Air, giving it the full power of a computer. As such, the headset will run on an operating system similar to MacOS, giving users access to a wide range of computing activities and popular Apple applications.

Everyday functions such as video calling, editing, word processing, web browsing, and different entertainment options set the Vision Pro apart from other headsets.

Meanwhile, the many capabilities show Apple employing a product strategy it has used successfully in the past. When the Apple Watch first launched, critics voiced concerns that it didn't have an obvious use. As a result, Apple pumped the smartwatch full of different features and allowed consumers to decide its best use case. 

Apple has seemingly done the same with the Vision Pro. Investors might not know how it will improve consumers' lives yet, but it could be a game changer in the coming years. The Vision Pro will start at $3,499, pricing out many consumers. However, the company will likely bring down the cost with future generations.

Apple's history of dominance and immense success in consumer tech bode well for the long-term performance of the headset. 

If Apple can replicate its history of entering new product markets and growing into a position of dominance, the company and its investors could profit substantially from the development of VR. 

2. Advanced Micro Devices

As a leading chipmaker, Advanced Micro Devices (AMD -1.98%) likely has a crucial role in VR's future. The tech giant has become a go-to for companies seeking high-powered chips, with AMD supplying its hardware to countless devices across the industry.

The company exclusively supplies chips to Sony's PlayStation 5 and Microsoft's Series X|S game consoles. The partnerships have made gaming AMD's highest-earning segment, reporting $1.7 billion in revenue in the third quarter of 2023. Meanwhile, AMD's collaboration with Sony has proven its chips are capable of running VR workloads, as the PlayStation VR 2 headset is run directly off of the PlayStation 5.

As the VR market develops, more companies will likely turn to AMD to take their headsets to the next level. Meta's Oculus Quest 2 headset is currently run on Qualcomm's Snapdragon XR2, based on a 2020 smartphone chip. With Apple upping the game by offering the power of a full computer in its coming headset, Meta and other companies will want to match that power in future headsets, and AMD has the chips capable of doing just that. 

AMD has solid positions in multiple areas of tech, forming partnerships with countless companies across the sector. Its powerful chips give it a strong outlook in VR, making its stock an excellent way to invest in the burgeoning industry.