Meta's AI Breakthroughs Dominate Connect Event As Analyst Highlights Affordable Mixed-Reality Push

Meta Platforms Inc. META continues to excite investors and tech enthusiasts with its AI and AR advancements.

The company's latest Meta Connect event highlighted innovations in its AI assistant, AR glasses, and more affordable mixed-reality headsets, signaling Meta's ambition to shape the future of computing.

AI Assistant & Ad Tools: Early Wins

JPMorgan analyst Doug Anmuth notes that Meta's AI developments are already driving tangible benefits, particularly in advertising. "1M+ advertisers are leveraging Gen AI ad tools, & Gen AI ad campaigns are resulting in 11% higher click-through rates & 7.6% higher conversion rates," he says.

With over 400 million monthly active users, Meta AI is on track to become the most-used AI assistant by year-end.

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AR Glasses: Orion and Ray-Ban Meta

Meta's AR efforts, led by the Orion glasses, could represent a major leap forward in computing. "Orion combines physical & virtual worlds to drive connectivity by enabling digital experiences that leverage holographic displays," says Anmuth.

Though still in prototype, Meta believes Orion has the potential to be a game-changing platform.

Anmuth also highlights the enhanced Ray-Ban Meta glasses, which now offer real-time translation and natural conversation features. These upgrades deepen Meta's AR ambitions and cater to gadget users looking for more practical use cases.

Affordable Mixed-Reality: Quest 3S

Meta's introduction of the Quest 3S, priced at $299.99, offers an affordable entry into mixed reality, with the same performance as the more expensive Quest 3. The price cuts position Meta “to reach the mass market through lower-cost devices, especially compared to Apple's Vision Pro starting at $3,499," Anmuth noted.

Meta Stock Investor Takeaway

Despite the innovation, Reality Labs' projected losses of $19 billion in 2024 and $23 billion in 2025 remain a concern.

However, Anmuth believes Meta's strong core business justifies its heavy AI and AR investments.

As a result, he raised Meta's price target from $610 to $640, reiterating an Overweight rating.

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