Meta's Smart Glasses Venture: A Shift Toward Reality Labs Profitability

Meta Platforms has invested in EssilorLuxottica, maker of Ray-Ban and Oakley glasses, in a 3% stake. This signals both firms' commitment to smart glasses, with EssilorLuxottica confident in the long-term future of the technology. Meta is betting on EssilorLuxottica's shares rising based on their joint tech. The investment marks a shift in focus for Reality Labs toward smart glasses, which need to see massive sales growth to become profitable.

Title: Meta Platforms' Investment in EssilorLuxottica Signals Commitment to Smart Glasses

Meta Platforms (NASDAQ: META) has recently acquired a 3% stake in EssilorLuxottica, the maker of Ray-Ban and Oakley glasses. This investment underscores both companies' commitment to smart glasses and signals a shift in focus for Meta's Reality Labs segment.

The investment, valued at approximately $3.51 billion, comes as Meta and EssilorLuxottica continue their collaboration on multi-generational smart eyewear products. This partnership, which began in 2019, has resulted in two generations of Ray-Ban Meta smart glasses, with the latest iteration featuring customizable frames, improved camera technology, and AI capabilities [2].

Meta's focus on smart glasses is a strategic shift away from its metaverse initiatives, which have faced challenges and lost significant market value. The investment in EssilorLuxottica is part of Meta's broader effort to leverage AI and technology in advertising and other revenue streams.

EssilorLuxottica's stock price saw a 5.8% increase following the announcement of Meta's investment, indicating market confidence in the long-term potential of smart glasses. The companies' collaboration has led to the development of performance AI glasses, such as the Oakley Meta HSTN Ltd., which incorporate Meta's AI technology with EssilorLuxottica's Oakley brand frames [2].

For Meta, the success of smart glasses is crucial for the profitability of Reality Labs. The Vision Council estimates that around 85% of Americans wear non-prescription sunglasses, presenting a significant market opportunity. However, Meta's Reality Labs segment has yet to achieve profitability, and the company's smart glasses sales need to grow massively to turn a profit [1].

Meta's 2025 goals include selling between two million and five million Ray-Ban smart glasses, but the segment's sales fell by around 6% in Q1 2025, making it challenging to meet these targets. The release of new smart glasses, such as the Oakley Meta HSTN Ltd., and the planned collaboration with Prada for AI-based smart glasses, may help boost sales and revenue.

As Meta's stock has recovered from its metaverse push, the company is betting that its investment in EssilorLuxottica will pay off in the form of rising shares. However, the entry of competitors like Google, which is partnering with Samsung and Warby Parker to release its own smart glasses in 2026, could pose a significant threat. Therefore, strong sales growth in Meta's smart glasses is crucial for maintaining the company's share price and overall financial health.

In conclusion, Meta's investment in EssilorLuxottica signals a renewed focus on smart glasses and a commitment to leveraging AI technology in this growing market. While the path to profitability remains uncertain, the collaboration with EssilorLuxottica and the release of new smart glasses products offer promising opportunities for Meta's Reality Labs segment.

References

[1] https://www.theglobeandmail.com/investing/markets/stocks/META/pressreleases/33516456/2025-a-pivotal-year-for-smart-glasses-as-meta-invests-in-ray-ban/

[2] https://glance.eyesoneyecare.com/stories/2025-07-15/meta-reportedly-buys-minority-stake-in-essilorluxottica/