Facebook Betting on Virtual Reality Future With Oculus Quest 2
Companies / Virtual Reality Dec 29, 2020 - 05:13 PM GMTBy: Nadeem_Walayat
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6. Facebook $266
The recent big news for Facebook was the launch of the standalone VR headset Quest 2, which IS a significant improvement on the Quest 1 and from what I can see has NO serious competition, so Facebook currently dominates the growing VR market. Furthermore Facebook is tightening it's grip on the tech by demanding that users have facebook accounts in good standing to enable them to use the Quest 2. Failure to have an facebook account in good standing has been resulting in many Quest 2 owners being locked out of their VR headsets.
Having personally used the Quest 2 I can confirm that it is a significant improvement on the Quest 1 in terms of resolution and performance whilst being sold at a lower price than Quest 1 (£399 vs £499) so should further tighten Facebook's grip on the VR market because as far as I can see it does not have a competitor in the standalone VR market. Plus one can connect the headset via a USB cable to use PC VR games that run better in terms of speed and detail than those running just off the Quest2.
Clearly Facebook is working towards a future where many millions if not billions of people plug themselves for hours per day into VR online facebook communities where they can meet family and friends in virtual environments which is going to happen and for which Facebook is way ahead of the rest with the next big innovations likely to take place in the augmented reality space i.e. merging of the real world with the VR world that Quest 2 headset is at the very beginnings of i.e. a virtual office that includes, keyboard and computer monitor, so it's not long before one can sit down and do their work in front of a virtual their desktop computer anywhere in the world, all without having to carry around anything more than a VR headset, we are perhaps no more than a year away before that starts to become possible with say Quest 3 or even the Quest 2 in limited manner.
Facebook's current EC is 50 (41), so in a sector of rising valuations the stock does look like better relative value for money than most, though nowhere near as cheap as where it was trading say 6 months ago (34).
The stock price at $266 is still up near double where it was trading during March, even after having retreated from a late August peak of $304. The downside appears limited to between $244 and $258, with the next support lower around 240. So much of any expected downside has already happened for Facebook therefore the buying level range is $256 to $260, However it could take some time before we see a return to new all time highs, so either way Facebook is likely to mark time before see it trading above $300 as valuations play catchup.
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Nadeem Walayat
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
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