Facebook parent company Meta is reportedly in talks for a 5% stake with Ray-Ban owner EssilorLuxottica, which Meta has already partnered with on its smart-glasses product. Meta stock was up in morning trades, positioning the company to break a streak of five straight trading days in the red.
Both the Financial Times and Wall Street Journal reported early Thursday that the two companies were in talks for an investment that could be worth up to $5 billion. If completed, the move could bolster Meta's push to offer AI-enabled smart glasses.
The latest version of Meta's Ray-Ban-branded smart glasses offer an HD camera, calling capabilities and some voice-enabled AI assistant features. With mostly positive reviews, the product has been a standout within Meta's broader push to offer augmented- and virtual-reality products. Meta released the second-generation version of the glasses in September, which sell for $299 to $379.
The deal would help Meta build more devices in partnership with the luxury eyewear maker, according to the Wall Street Journal. Meta hopes to have a third version of the glasses by late 2025, according to the report. Meta declined to comment to IBD on Thursday.
On the stock market today, Meta stock is up 2.9% to 475.55 in afternoon trades. Meanwhile, American depositary receipts for the France-based EssilorLuxottica were up 1.9% at 105.55 in recent action.
Metaverse Meets AI
Meta has not revealed any sales data for the smart glasses but called out their success following the company's first-quarter earnings report this spring.
"The Ray-Ban Meta glasses that we built with EssilorLuxottica continue to do well and are sold out in many styles and colors," Meta Chief Executive Mark Zuckerberg told analysts in April. "So, we're working to make more and release additional styles as quickly as we can."
Zuckerberg changed the company's name from Facebook to Meta in 2021 to underscore his belief that the metaverse is the future of computing. The results so far have been iffy.
The big costs to develop products have not been paid off by sales of Meta's signature VR headsets. Heavy losses for the company's VR-focused Reality Labs division paired with slowing social media advertising growth helped tank Meta stock late in 2022.
But Meta also has been positioning itself as an AI leader. The smart glasses combine some of Meta's hardware capabilities with its AI model that powers a chatbot. At a developer event in September, Zuckerberg said he envisioned AI-enabled smart glasses powering a "mixed-reality" vision of the metaverse.
"Mixed-reality allows you to bring digital objects into the physical world," Zuckerberg said. "Advances in AI allow us to create different AIs and personas that can help us accomplish different things. And smart glasses are going to eventually allow us to bring all of this together into a stylish form factor that we can wear all day."
Meta Stock Slump
Meanwhile, Meta stock is looking to break a streak of five straight days with losses. Big tech stocks within the so-called Magnificent Seven have each struggled.
Shares for Meta are up 31% this year. But the recent slump has Meta stock down 15% from a high of 542.81 reached intraday on July 8.
Meta stock closed on Tuesday below its 50-day moving average and fell even further on Wednesday in heavy volume. Thursday's early gains still have Meta below the 50-day line.
Meta is scheduled to report second-quarter earnings on July 31.
