A micro-cap competitor to Meta in the smart glasses market has seen its stock price rise by 60%. What's the reason?

Shares of micro-cap smart glasses maker Innovative Eyewear—which aims to challenge major tech companies in the AI-powered wearable devices sector, including Meta— soared nearly 64% on August 24. The company announced the launch of its glasses at one of the largest U.S. retail chains, as well as a partnership with Taiwanese tech giant HTC Corporation.

Shares of Innovative Eyewear (formerly Lucyd) rose nearly 64% on the Nasdaq on August 24, reaching $1.12—their highest level since early July.

Investors reacted immediately to two pieces of news from the company. First, on August 24, the company announced that starting in October, its Lucyd Armor smart glasses would go on sale in more than 150 stores of “one of the largest retail chains in the U.S.” (the chain’s name was not disclosed in the press release).

Innovative Eyewear then announced an agreement with Taiwanese electronics manufacturer HTC under which it will commercialize HTC’s VIVE Eagle line—smart glasses equipped with AI cameras—in the United States. The micro-cap company plans to sell the glasses through its flagship online store, Lucyd.co. Customers will be able to order them with Innovative’s prescription lens service. Sales are scheduled to begin in September, according to a press release.

Innovative Eyewear was founded in 2019; it was originally called Lucyd—the same name as its smart glasses brand. The company later began manufacturing products in collaboration with Nautica, Eddie Bauer, and Reebok, which led to a name change.

Innovative Eyewear is among the startups seeking to challenge major tech companies in the field of AI-powered wearable devices, as the Observer reported two years ago. In the smart glasses market, Meta—the owner of Facebook, Instagram, and WhatsApp—is the undisputed leader, according to Wired.

But while the tech giant uses its own AI models in its products, Innovative Eyewear is banking on flexibility. Through the Lucid app, users can choose which assistant to interact with—OpenAI’s ChatGPT or Claude—and switch between them during a conversation without losing context. “We envision that in the future, Lucyd users will be able to access several of the world’s most powerful AI models with a simple voice command,” said Harrison Gross, CEO of Innovative Eyewear.

He also noted that the company’s focus on a broader target audience sets it apart from Meta. “In my view, Meta’s product is geared toward the niche of content creators. If you’re a content creator who shoots a lot of videos for Instagram, their product is a better fit for you than ours,” Gross told the Observer.

Only one Wall Street analyst—from Maxim Group— is tracking the company’s performance. He recommends holding the company’s stock, although he had previously advised buying it. The investment bank downgraded its rating in June due to concerns about the company’s projected gross profit and the potential need for additional capital to support its operations and growth plans, GuruFocus reported.

Later, in August, Innovative Eyewear reported that its net revenue for April–June had grown 74% year-over-year—the quarterly figure exceeded $1 million for the first time. Operating expenses for the same period fell by 10% to $1.9 million, while the net loss decreased by 21% to $1.67 million, or $0.26 per diluted share.

The target price for the company's stock is $3, which is 150% higher than the last closing price.