Meta Platforms Inc. (NASDAQ:META) is set to acquire a 5% stake in Essilorluxottica (OTC:ESLOY), a move that has caught the attention of financial expert Jim Cramer. He believes this deal could be a game-changer for Meta's future in the wearable tech space.
What Happened: Cramer, host of CNBC's "Mad Money," expressed his views on "Squawk Street" on Thursday about the future of Meta Platforms in the wearable tech industry. The company's stock saw a rise following the news of the potential investment in EssilorLuxottica.
The deal with EssilorLuxottica, the manufacturer of Ray-Ban smart glasses, is seen as a significant development by Cramer. He highlighted the intense production at the company's Italian factory and the potential for "instant AI" use cases with the smart glasses.
All eyes are on $META, with reports that they're taking a 5% stake in Ray-Ban parent EssilorLuxottica. How are things looking from here? @jimcramer delivers his vision for the company's future in wearables in today's #MadDash. pic.twitter.com/kDlIWOv7Lp
— Squawk on the Street (@SquawkStreet) July 18, 2024
The investment in EssilorLuxottica, valued at approximately 4.5 billion euros ($5 billion), is expected to further strengthen the partnership between the two companies. The Ray-Ban Meta smart glasses, launched last year, have exceeded sales expectations, leading Meta to consider developing more devices in collaboration with EssilorLuxottica.
The third generation of Ray-Ban Meta glasses, anticipated to feature a small screen display, is slated for release during the 2025 holiday season. The popularity of the Ray-Ban brand is crucial for the success of wearable tech, and the partnership with EssilorLuxottica, which also owns LensCrafters, will facilitate the introduction of the Ray-Ban Meta to users requiring prescription lenses.
Why It Matters: Meta's strategic investment in EssilorLuxottica comes at a crucial time. The wearable tech market is becoming increasingly competitive. Recently, Solos announced its new AirGo Vision smart glasses, powered by OpenAI's ChatGPT technology, which could pose a significant challenge to Meta's offerings.
Additionally, Apple Inc. (NASDAQ:AAPL) is reportedly developing its own AR smart glasses, although these may not hit the market until 2027. This gives Meta a potential head start in establishing its dominance in the smart glasses sector.
Moreover, Meta has been enhancing the functionality of its Ray-Ban Meta smart glasses. As of May, users can now share directly to Instagram Stories, adding another layer of integration with Meta's social media platforms.
Price Action: Meta Platforms Inc. closed at $475.85 on Thursday, marking an increase of 3.00%. In after-hours trading, the stock rose further 0.75%. Year to date, Meta's stock has appreciated by 37.41%, according to data from Benzinga Pro.
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Photo courtesy: Ray-Ban
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote