Meta Platforms Inc.
The company's latest Meta Connect event highlighted innovations in its AI assistant, AR glasses, and more affordable mixed-reality headsets, signaling Meta's ambition to shape the future of computing.
AI Assistant & Ad Tools: Early Wins
JPMorgan analyst Doug Anmuth notes that Meta's AI developments are already driving tangible benefits, particularly in advertising. "1M+ advertisers are leveraging Gen AI ad tools, & Gen AI ad campaigns are resulting in 11% higher click-through rates & 7.6% higher conversion rates," he says.
With over 400 million monthly active users, Meta AI is on track to become the most-used AI assistant by year-end.
AR Glasses: Orion and Ray-Ban Meta
Meta's AR efforts, led by the Orion glasses, could represent a major leap forward in computing. "Orion combines physical & virtual worlds to drive connectivity by enabling digital experiences that leverage holographic displays," says Anmuth.
Though still in prototype, Meta believes Orion has the potential to be a game-changing platform.
Anmuth also highlights the enhanced Ray-Ban Meta glasses, which now offer real-time translation and natural conversation features. These upgrades deepen Meta's AR ambitions and cater to gadget users looking for more practical use cases.
Affordable Mixed-Reality: Quest 3S
Meta's introduction of the Quest 3S, priced at $299.99, offers an affordable entry into mixed reality, with the same performance as the more expensive Quest 3. The price cuts position Meta "to reach the mass market through lower-cost devices, especially compared to Apple's Vision Pro starting at $3,499," Anmuth noted.
Meta Stock Investor Takeaway
Despite the innovation, Reality Labs' projected losses of $19 billion in 2024 and $23 billion in 2025 remain a concern.
However, Anmuth believes Meta's strong core business justifies its heavy AI and AR investments.
As a result, he raised Meta's price target from $610 to $640, reiterating an Overweight rating.
