Meta Debuts Next-Gen AI Glasses—A Turning Point for Reality Labs?

Meta Platforms NASDAQ: META recently held one of its biggest events each year: Meta Connect. At this event, the company takes the opportunity to unveil its latest innovations when it comes to consumer devices. This year, Meta released the next generation of its artificial intelligence (AI) glasses: the Meta Ray-Ban Display. With this device, Mark Zuckerberg may have moved closer to his goal of AI glasses eventually replacing smartphones. However, for investors, what could the Meta Ray-Ban Display mean for the tech stock in the short and long term? Could it be a breakthrough for Meta’s Reality Labs segment? Let’s break down this new device and its potential implications for the stock below.Get Meta Platforms alerts: Meta Ray-Ban Display: Huge Advancements, Strong Reviews Right off the bat, it’s clear that the Meta Ray-Ban Display is a significant upgrade over the company’s past AI glasses. This comes, as the device’s name would suggest; it includes a visual display. Wearers can interact with a two-dimensional display in the right lens. Users can now operate the device more discreetly with a visible interface, reducing the need to speak and enabling easier public use. Wearers can use the display to send and receive messages on WhatsApp, Messenger, and Instagram, and access a map that provides turn-by-turn walking directions. They can also now see a preview of the picture or video they want to capture. Before, capturing images with the Ray-Ban glasses was somewhat of a guessing game. Meta says this image previewing feature was the number one request it received from users of the previous device. The device can also provide subtitles and translate foreign languages when speaking to another person. Despite these considerable advancements, the most interesting feature of the device is how wearers interact with the display. With the glasses comes a wristband called the Meta Neural Band. The band reads electric impulses from the user's arm to detect hand gestures corresponding to different controls. Early reviews of the device have been generally very positive, with Engadget’s Karissa Bell saying it "feels like the beginning of the kind of smart glasses a lot of people have been waiting for." Strong Adoption Could Alter Investor Outlook on Reality Labs With this new tech, Meta seems to have taken a big step forward in its mission to one day replace smartphones with AI glasses. Still, it can’t do nearly as much as a smartphone, and the number of applications users can access is very small. Thus, the Meta Ray-Ban Display doesn’t make the firm any type of real threat to Apple NASDAQ: AAPL at this point. However, the device can add upside to Meta's shares. Compared to past Meta glasses, the visual display is much more aligned with what smartphones offer. Thus, they provide a tangible and early demonstration of a product that, with further advancements, could compete significantly with smartphones. If sales are strong, the prospect of widespread adoption of AI glasses in the future becomes more realistic, as consumers show they are open to this potential future. Seeing this positively shift sentiment on Reality Labs wouldn't be overly surprising. So far, many have viewed the segment as a nuisance on Meta’s income statement, tolerated due to its impressive advertising business. The success of the Meta Ray-Ban Display could change this view, positioning Reality Labs as a business with a more verifiable chance of long-term success. This could create positive near-to-mid-term price action in Meta shares when data on the device’s sales comes out. However, if adoption is weak, an opposite reaction could also occur. Still, Reality Labs has been losing over $3 billion a quarter for at least two years. Nonetheless, Meta shares have soared over that time, showing that markets aren’t holding this against the company much. AI Glasses Continue to Add Long-Term Upside Potential Longer term, the rapid advancement of Meta’s AI glasses continues to support the notion that Meta could one day become a worldwide leader in AI hardware. Its current place as a leader in social media and AI advertising makes it a difficult company to bet against. Whether its latest device will be a breakthrough for Reality Labs remains in question, but the bullish outlook for the stock continues until something significant changes.Should You Invest $1,000 in Meta Platforms Right Now?Before you consider Meta Platforms, you'll want to hear this.MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Meta Platforms wasn't on the list.While Meta Platforms currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.View The Five Stocks Here