By Carol Ryan and Dan Gallagher
The smartphone's monopoly on our attention is vulnerable in the AI age. This leads Meta Platforms CEO Mark Zuckerberg to think smartglasses are finally ready to live up to their potential.
Investors who agree with him have a problem, though. The obvious move would be to buy Meta's stock in hope of riding the smartglasses wave. But there's a lot more to Meta than that product, including aggressive capital spending to keep up in the AI race and the loss of two landmark social-media addiction trials last month.
Fortunately, there is a more direct way to play this particular vision: EssilorLuxottica, the under-the-radar $100-billion company that manufactures the tech giant's Ray-Ban smartglasses.
The company's shares, which trade in France, have shed more than a third of their value from recent highs. The stock tumbled amid broader market turbulence that has hit many highflying companies, especially big tech.
So while Essilor's forward earnings multiple is higher than Meta's, it is now below its five-year average. This provides investors with a more reasonable entry point if they think smartglasses are about to overcome a history of false starts.
Tech companies have been tinkering with smartglasses and other face-mounted computing devices for over a decade. But the products they have come up with so far have ranged from expensive flops to niche devices that only appeal to a subsegment of a particular industry, like videogames.
Google Glass was pulled from the consumer market in early 2015, less than a year after its launch. That device was most famous for landing its few, brave buyers the moniker " glassholes."
A decade later, Apple's Vision Pro mixed-reality headset hasn't seemed to fare much better. The company doesn't break out sales data on the product, but revenue in Apple's wearables category fell 7% in the fiscal year ended September 2024 -- the year the Vision Pro went on sale. A $3,500 price tag and cumbersome battery pack tethered to the headset certainly weren't selling points.
But Meta may have a hit on its hands. Last year, it shipped 7.3 million pairs of Ray-Ban Meta smartglasses, data from IDC shows. That's more than the company ever sold of its VR headsets in a single year.
The AI glasses market is small but growing fast. It is expected to reach 13.4 million units in 2026, based on IDC estimates.
Meta's strategy to start with a design that consumers are already comfortable wearing in public appears to be part of its success. It teamed up with Paris-listed EssilorLuxottica to design a smart version of Ray-Ban's Wayfarers, which is one of the bestselling sunglasses styles in the world.
With a basic $299 pair of Meta's Ray-Ban specs, wearers can make phone calls, record hands-free videos and take photos, as well as get answers from AI Meta. Zuckerberg has boasted about taking a phone call on a pair of smartglasses while jet skiing.
Last September, Meta launched a $799 model with a built-in display on the right lens. That allows users to view text messages and videos, get live navigation or translation without having to look down at their phone. The Ray-Ban Display models have been largely sold out in the U.S. The European launch has been delayed due to a mix of regulatory hurdles and limited supply to meet demand.
That bodes well for EssilorLuxottica even though its stock has struggled this year. This is due to worries that its growing smartglasses business -- which is less lucrative than old-school glasses -- could pressure margins.
Still, the shares aren't exactly cheap, changing hands for 25 times expected earnings to Meta's 18-times multiple.
But Meta's valuation reflects challenges that won't be going away soon. The company's intense capital spending on AI is likely to stay elevated for years, given Zuckerberg's stated intention to build "superintelligence."
And the company's recent courtroom losses raise the possibility of the Facebook and Instagram parent facing big legal charges down the road. Those could arise if it is forced into a large settlement and changes to its lucrative business model.
EssilorLuxottica carries none of that baggage while being Meta's key partner in smartglasses. This positions it to benefit from Zuckerberg's ambitious vision for AI without the 12-figure capital bills. Zuckerberg called glasses "the ideal form factor for personal superintelligence," during his introduction of the latest specs at the company's Meta Connect conference last year.
That said, too much success could cause problems for EssilorLuxottica. Traditional glasses are quite profitable. Luxury sunglasses, for example, can have a gross margin of 80%. The margin on Meta's smartglasses may only be 50%, according to analysts.
But the revenue boost from faster sales should offset some of the hit. And consumers seem willing to pay around double the price for AI-powered specs than for a "dumb" pair.
Meta and EssilorLuxottica will soon face competition from other deep-pocketed team-ups. Google-parent Alphabet has partnered with Kering, the luxury goods company that owns Gucci and has an eyewear business. It is also working with niche eyewear company Warby Parker to launch a new pair of smartglasses this year.
The bigger threat may come from Apple, which is rumored to be working on a new pair of smartglasses. It obviously has a formidable track record of upending consumer categories.
The difference for EssilorLuxottica is that it is already making millions of smartglasses a year and has more than 18,000 stores to sell them in. If consumers reach for smart specs in big numbers, the stock should see gains.
Write to Carol Ryan at carol.ryan@wsj.com and Dan Gallagher at dan.gallagher@wsj.com
(END) Dow Jones Newswires
April 04, 2026 05:30 ET (09:30 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
