Meta Platforms stock is pushing higher after Chief Executive Mark Zuckerberg announced a series of new smart glasses late Wednesday, including one with a small built-in display. Wall Street analysts appeared positive on the future for AI-powered smart glasses.
Zuckerberg's keynote kicked off the social media giant's annual Connect conference for developers. The event comes as Meta is pledging to invest "hundreds of billions" to develop advanced artificial intelligence capabilities that Zuckerberg touts as superintelligence. It is investing tens of billions more in its Reality Labs division, which is focused on the metaverse. The company sees smart glasses as a way to tie those technologies together.
"Our goal is to build great-looking glasses that deliver personal superintelligence and a feeling of presence using realistic holograms," Zuckerberg said late Wednesday.
As anticipated, Zuckerberg announced the launch of Meta's Ray-Ban Display smart glasses. The $799 glasses feature a small display technology that can surface the Meta AI chatbots, some apps and other information based on their user's surroundings. Meta also announced a second-generation version of its standard Ray-Ban smart glasses, which for $379 feature longer battery life and a better camera. The company also announced a pair of $499 Oakley glasses with similar features that are aimed at athletes.
The Connect event opened with a video showing Zuckerberg's view from his Display glasses as he walked into the theater at Meta's Menlo Park, Calif., headquarters. In a small corner display, the glasses showed a mix of Spotify music selections, messages and photos.
Wall Street Reaction To Meta Connect
BofA Securities analyst Justin Post said the glasses appeared functional and unobtrusive. He rates Meta stock a buy.
"Given extensive audio and visual use cases, and AI enhancement capabilities, we remain optimistic that AR (augmented reality) glasses are likely to become the leading device for the AI era," Post wrote. "However, we think the $800 AR glasses are still early for mass adoption given limited style choices, price point, and battery life."
Stifel analyst Mark Kelley said the $799 price for the Ray-Ban Display glass appears "wildly attainable price point for the amount of tech baked into the product." That's despite, he acknowledged, some issues with the live demo. The Meta AI assistant connected to the glasses struggled with providing step-by-step directions for a recipe during the event.
Zuckerberg has previously touted smart glasses as the next-generation computing platform, replacing some tasks currently done on smartphones and tablets. Analysts gave that view some credence following the Facebook founder's presentation.
"With these glasses, we see the importance of a full stack approach to next-gen computing platforms, and with proprietary hardware, an operating system grounded in AI and leading content available to users on release, we think Meta has all the building blocks necessary to capture this opportunity," Morgan Stanley analyst Brian Nowak wrote to clients Thursday.
Nowak rates Meta stock as overweight, or buy. But he does not expect glasses to provide a "material financial tailwind in the near term."
Meta Stock: Competition For AI Glasses
Meta was early to the smart glasses market with its Ray-Ban glasses. But competition is heating up. Amazon, Google parent Alphabet, Snap and others have augmented-reality glasses products in various stages.
Apple is also reportedly working to launch smart glasses next year.
Gene Munster, managing partner of Deepwater Asset Management, said in a blog post that Zuckerberg may have the power to "will glasses into reality" over the long term.
"The bottom line: I believe glasses will go mainstream, but not for a while," Munster wrote late Wednesday. "My estimate is that it won't be until 2030 that the company reaches a 50 million units per year run rate. Eventually, I believe the AI wearables opportunity could scale into the high hundreds of millions of units annually."
Despite some glitches, investors seem happy overall with what Meta launched during the event. Meta stock is ahead 1.4% at 786.47 in recent morning trades on the stock market today.
Shares have gained 34% year to date. Meta was Tuesday's IBD Stock Of The Day, as shares bounced higher from their 21-day moving average and broke from a short downtrend.
