Ray-Ban maker shares hits all-time high as investors bet on Meta AI glasses boom

A visitor tries on Meta's new Ray-Ban Gen 2 smart glasses during Meta Connect. (Credit: Carlos Barria/Reuters via CNN Newsource)

Shares in Ray-Ban maker EssilorLuxottica rose 14 per cent to hit an all-time high on Friday, adding nearly US$20 billion in market value as investor enthusiasm for its AI-powered Ray-Ban Meta glasses gathered momentum.

The Paris-listed group, founded by late Italian entrepreneur Leonardo Del Vecchio and a possible contender in the race to buy fashion group Armani, reported on Thursday third-quarter sales growth of 11.7 per cent from a year ago to 6.9 billion euros ($8.1 billion).

The results beat expectations and marked the company’s best quarterly performance ever amid strong demand for wearable products such as the smart glasses it has been developing with Meta since before the pandemic.

Even though the smart glasses business has until now accounted for only a fraction of EssilorLuxottica’s total revenue, it has become a focal point for analysts and investors, as well as a catalyst for the company’s investments.

Barclays analysts have predicted smart glasses could become the most disruptive innovation since mobile phones, forecasting 60 million units sold globally by 2035.

The AI-powered glasses contributed over four percentage points to sales growth, said Chief Financial Officer Stefano Grassi, with demand prompting EssilorLuxottica to accelerate production capacity plans for the glasses ahead of schedule.

“The exponential growth of wearables provided an extra-boost to the top line performance,” the company said in a statement on Thursday.

Shares post biggest daily rise since 2008

EssilorLuxottica’s shares were up 13.8 per cent by 1400GMT, the biggest daily gain since 2008, lifting the company’s market capitalisation to 126.5 billion euros.

The move drove the European luxury benchmark Stoxx Europe Luxury 10 up over 7% on the week, the index’s biggest weekly gain since January.

The latest Ray-Ban Meta models, priced from $379 to $799 for a new flagship version with built-in display, are currently sold in limited physical stores with expansion to Canada, France, Italy and Britain planned for early 2026.

The emerging success of Meta’s Ray-Ban smart glasses has reignited a long dead category of eyewear computers as Google and Microsoft MSFT.O had previously abandoned the market.

By marrying upgraded cameras and generative AI features with Ray-Ban’s designs, Meta has lured big tech rivals back into the market. Google and Samsung are working on glasses based on the Android XR platform. Apple is reportedly working on smart glasses.

J.P. Morgan analysts said in a note to investors the smart glasses were now a “material growth driver” while the company’s core business remained resilient.

Equita analysts upgraded their annual revenue forecast for wearables, and now expect an impact on the group’s sales of about one billion euro this year, according to a research note.

“The acceleration in third-quarter revenues and the level of confidence expressed on fourth-quarter and mid-term prospects are an important indicator of the success of the group’s strategic drivers,” they said.

(Reporting by Gianluca Lo Nostro, additional reporting by Laura Contemori and Elisa Anzolin; Editing by Milla Nissi-Prussak, Lisa Jucca and Matt Scuffham)