Despite reporting its fastest quarterly growth since the pandemic in the first quarter, Meta Platforms (META +1.50%) has struggled this year.
The stock is down 17% year-to-date due to concerns about rising capital expenditures, layoffs, and artificial intelligence strategy that increasingly seems undisciplined.
As a result, Meta stock is looking unusually cheap, trading at a forward P/E of just 17, which is dirt cheap for a company that just grew its revenue by 33%.
At this point, the company needs a catalyst to change its narrative, and it’s hopeful that its latest iteration of smart glasses can help do that.
Image source: The Motley Fool.
Meta’s $300 smart glasses
Meta has been building out its smart glasses business for years now, partnering with brands like Ray-Ban and Oakley.
At $299, the new Meta are $80 less than its previous entry-level glasses, and it’s partnering with Ray-Ban parent EssilorLuxottica to make them, though they won’t carry the Ray-Ban brand.
The glasses come in 26 styles and include Meta AI, powered by Muse Spark, its new and improved large language model that replaced LLaMa.
Meta sees glasses as the ideal device for the AI era, as users can easily communicate with them, and they provide an AI assistant that can see what you’re seeing.
EssilorLuxottica said it sold more than 7 million of the AI glasses in 2025, up from just 2 million combined in 2023 and 2024, a sign that smart glasses are making progress in going mainstream.
However, Meta will have to ramp up glasses considerably to move the needle on the top line. Assuming an average price of $400 for those glasses, they would generate $2.8 billion in revenue, though that would be split between the two companies.
Today’s Change
(1.50%) $8.13
Current Price
$551.00
Key Data Points
Market Cap
$1.4T
Day’s Range
$540.50 – $556.84
52wk Range
$520.26 – $796.25
Volume
870.9K
Avg Vol
17.6M
Gross Margin
81.94%
Dividend Yield
0.39%
Meta’s AI strategy
In 2025, Reality Labs, Meta’s division that contains its smart devices, including glasses and VR headsets, AI labs, and metaverse projects, reported just $2.2 billion in revenue, essentially flat from the year before. Reality Labs lost $19.2 billion due to its spending on AI infrastructure. In 2026, the company expects 70% of its Reality Labs, or roughly $15 billion in expenses, to go to wearables like glasses and VR headsets.
Given the ongoing losses at Reality Labs and the company’s plan to spend $125 billion-$145 billion in capital expenditures this year, it’s understandable that investors want to see a return on that investment. Some of its AI spending is going to support the core family of apps business, and its advertising engine, which brought in more than $80 billion in operating income last year.
Meta is also the only one of the four major hyperscalers, which includes Amazon, Alphabet, and Microsoft, that doesn’t have a cloud computing business. CEO Mark Zuckerberg has said that starting one is “definitely on the table,” and doing so seems like a smart move for the company, as it’s already receiving interest from prospective customers.
In the AI era, demand for cloud infrastructure has skyrocketed, and Amazon, Alphabet, and Microsoft are all seeing accelerating growth in their cloud businesses, a sign that there would be sufficient demand for a Meta Cloud.
Today’s Change
(1.50%) $8.13
Current Price
$551.00
Key Data Points
Market Cap
$1.4T
Day’s Range
$540.50 – $556.84
52wk Range
$520.26 – $796.25
Volume
870.9K
Avg Vol
17.6M
Gross Margin
81.94%
Dividend Yield
0.39%
What it means for investors
At this point, Meta seems oversold. Like Microsoft, the stock has tumbled on concerns that it’s overspending on capex, but there’s no structural risk to the advertising business, and a forward P/E of 17 is a great price to pay for a company that dominates social media and has an operating margin of 41%, even with the losses in Reality Labs.
For the glasses business to make up 10% of its current revenue, Meta would need to grow that business to $20 billion, which could mean selling around 40 million of them. That won’t be easy, but its recent progress shouldn’t be overlooked, and a price point as low as $299 is likely to pull in some buyers.
At the current stock price, Meta’s risks seem more than priced in. The company doesn’t need glasses to be successful for the stock to work, but investors seem to be overlooking the possibility that the business does continue to scale and establish a viable second revenue stream for Meta.
