Jefferies Forecasts Meta to Generate Billions in Revenue from AI Glasses. What Will Happen to the Stock?

Meta shares, which have lost about 2% over the past five days, could resume their upward trend thanks to a “multibillion” opportunity for revenue growth related to AI glasses, according to Jefferies. The market has not yet priced this factor into its valuations, the investment bank noted.

Analyst Brent Till has reaffirmed his "buy" rating on the company's stock and set a price target of $825 per share, according to CNBC. This target implies upside potential of nearly 28% from Monday's, July 20, closing price.

“Although some aspects still need improvement, Meta has the first-mover advantage as the only player to have established mass production... We see the potential for multibillion-dollar revenue from the hardware business,” the analyst wrote. If the penetration rate of smart glasses matches that of the Apple Watch at an average price of $400, sales of these gadgets will bring Meta between $14 billion and $18 billion in the coming years, Till predicts.

In late June, Meta unveiled an updated lineup of AI glasses, which includes three models: Meta Adventurer, Fury, and Glasses by Kylie. The launch took place amid rapid audience growth: according to Jefferies, the number of daily users of these devices has tripled over the past year, and the company’s production capacity has reached 20 million units.

Till believes that more expensive subscriptions to AI services, advertising, and integration with e-commerce will serve as additional drivers of growth.

"In the long term, the main focus is on commerce. If agent-based AI shifts the interaction from independent search to task delegation, smart glasses will be able to detect users’ intentions the moment they spot a product, bringing Meta one step closer to facilitating a transaction,” the analyst concludes.

Jefferies’ optimism is in line with the general sentiment on Wall Street. According to LSEG, of the 65 analysts covering Meta, 57 recommend buying its stock. Over the past year, the company’s stock has fallen by about 8%, underperforming the broader market.

This article was AI-translated and verified by a human editor