When Facebook parent company Meta Platforms META hosts its annual developer conference this week, analysts expect the focus to be on augmented reality.
The event, scheduled for Sept. 25 and Sept. 26, has the potential for upside from artificial intelligence announcements.
Meta Connect 2024: Meta Platforms is expected to highlight new products at its annual Connect developer conference and share updates on its latest virtual and augmented reality devices.
Meta Connect will stream live on the company's official website for the event. Meta CEO Mark Zuckerberg will deliver the keynote address on Wednesday at 1 p.m. ET. Programming from other Meta executives will follow.
Owners of Meta Quest headsets can also watch the event live in Horizon Worlds.
Among the most anticipated items from the event could be a lower cots Quest 3S device with a reported $299.99 price, as reported by The Verge. Meta could also highlight its Ray-Ban Meta smart glasses.
The product highlights and price points could have Apple Inc AAPL and Snap Inc SNAP shares on high alert with competing products.
What Analysts Are Saying: The Meta Connect conference could show a shift in focus to augmented reality with hints of artificial intelligence, Bank of America analyst Justin Post said.
The analyst, who has a Buy rating and $563 price target, said the conference could highlight progress in augmented reality and artificial intelligence.
Post expects Meta to reveal a prototype of next-gen AR glasses and Meta to put a bigger focus on mixed reality and augmented reality during the presentations, instead of past focus on virtual reality.
"We expect Meta to also showcase growing AI capabilities, and the event may also include new AI product launches for core apps, announcements on Meta AI, and new AI messaging capabilities," Post said.
Meta could also launch a cheaper VR headset (Quest 3S) during the developer conference, the analyst added.
The company could also showcase third-party VR headsets from other companies building on the Horizon Worlds software platform, he added.
Post said Meta could unveil new AI functions for Messenger and WhatsApp and also give an update on large language models.
"We also think there is an opportunity for product demos showing how AI integrations across Facebook and Instagram are boosting engagement."
The analyst said there is also a small chance Meta unveils an AI subscription product during the event.
Rosenblatt analyst Barton Crockett said Meta Connect could lead the news cycle for AI for the week.
The analyst, who has a Buy rating with a $643 price target, said Meta could feature a cheaper virtual reality headset, show off new augmented reality glasses and highlight progress made in artificial intelligence integrated into existing products.
"Given Apple's sales challenges with Vision Pro, expectations for a pricey rival device from Meta have dissipated," Crockett said. "Instead, the focus is on the opposite — a cheaper version of the Meta Quest 3."
Crockett said the concern is how new products in virtual reality and augmented reality can help offset operating losses for the Reality Labs business segment.
"We struggle to see how Meta gets a positive ROIC (return on invested capital) on this. But Meta's willingness to absorb massive losses probably makes it hard for Apple and Snap to compete."
META Price Action: Meta stock trades at $566.54 on Monday versus a 52-week trading range of $279.40 to $573.98. Meta stock is up 64% year-to-date in 2024.
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Image: Courtesy of Meta Platforms
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