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.

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.

The model, called GPT-5.6 Sol, is the flagship in a new tier of more advanced models that includes a more efficient model called Terra and its cheaper cousin Luna. OpenAI says that Sol is its strongest model yet, able to complete 50% of long-running professional tasks and tops all previous OpenAI models on coding capabilities. OpenAI said it hopes to make all three generally available in the coming weeks.

The Information first reported that the Trump administration asks OpenAI to stagger release of the new model over security concerns.

The move represents a broader shift in how the U.S. government is approaching frontier AI. Advanced cyber capabilities displayed by Anthropic’s Mythos and OpenAI’s GPT-cyber have caused concern in Washington. By limiting access to the government is attempting to ensure that those capabilities don’t end up in the hands of bad actors or hostile nation-states

It is also the second time in a month that a frontier lab’s best model has been held back from general release over capability concerns. In early June, the Commerce Department issued export controls on Anthropic that forced the lab to cut off foreign access to two of its top models, citing national security concerns. Anthropic disputed the order, but was left with no choice but to pull the models offline.

Earlier this month, Trump also signed an executive order directing federal agencies to establish a framework under which AI companies could voluntarily provide the government with early access to powerful new models for up to 30 days before broader release. 

OpenAI describes its own situation as voluntary, in contrast to Anthropic’s situation.

“As part of our ongoing engagement with the U.S. government, we previewed our plans and the models’ capabilities ahead of today’s launch. At their request, we are starting with a limited preview for a small group of trusted partners whose participation has been shared with the government,” the company said in a blog post. 

However, the company also said it was not in favour of this kind of government access process becoming the “long-term default.”

We are taking this short-term step because we believe it is the strongest path to broader availability in the coming weeks,” the company wrote, adding it was working with the Administration to develop the cyber Executive Order framework and a “repeatable process for future model releases.”

Capability concerns

OpenAI emphasized that Sol made its strongest gains in cybersecurity, specifically vulnerability and exploitation. There will be two new modes: “max,” and “ultra,” which will allow the model to reason longer and coordinate agents for specific tasks. On a key cybersecurity benchmark, OpenAI previously said the model was “competitive with” Anthropic’s Mythos. GPT-5.6 Sol uses approximately one third of the tokens used by Mythos but appears to lag slightly behind Mythos 5, a slightly more capable model from Anthropic.

OpenAI is pairing the release with what it calls its most extensive safeguards to date, and says that the model preview will police its own use. For higher-risk cases, the company says a larger model will review the conversation and could withhold responding if it’s judged to violate policy. 

It said that, despite the government gating, Sol did not cross the “Cyber Critical” threshold in its “Preparedness Framework”: in tests with Firefox and Chrome, it found the seeds of an exploit but did not produce a working one. OpenAI said it had spent 700,000 GPU hours hacking itself to try to identify vulnerabilities, and humans will conduct two more weeks of the tests before launch.

The limited rollout is a transitional period, and linked to President Trump’s June 2 executive order that directed agencies to build a framework for vetting models before release, according to OpenAI. Since that framework doesn’t exist yet, OpenAI says it conducted a phased rollout at the government’s request. 

The initial users are customers who have been approved by the US government, with the list expanding next week, according to OpenAI. The company said that the process looks like OpenAI sharing names and the government giving feedback. 

Sol is priced at $5 per million input tokens and $30 per million output tokens, compared to Terra at $2.50 and $15, respectively, and Luna at $1 and $6. 

An improvised licensing regime 

The recent steps toward any kind of attempt to regulate AI also represents a striking reversal for an administration that, on its first day in office, had rescinded a Biden-era requirement for AI companies to submit safety tests to the government, calling it overly burdensome.

However, critics have argued that, by pursuing an ad-hoc approach to containing the risks, what is emerging looks less like a coherent regulatory system and more like an improvised licensing regime. Jonathan Iwry, a fellow at the Wharton Accountable AI Lab, previously told Fortune that the government is “repurposing existing legal authorities into what is effectively a backdoor licensing regime.”

Dean Ball, a former Trump administration AI adviser who has since become a vocal critic of its recent decisions, argued that since Mythos, the United States has had an “informal” licensing regime for AI, “with no consistent rules or firm boundaries on state power or public transparency.”

Critics warn that an informal system, with no published criteria or appeal process, opens the door to discrimination—giving the government unchecked power to decide which companies get access to the market and which do not, with no legal recourse for those on the wrong side of that decision.