Meta AI Glasses Sales Surpass 7 Million Units Last Year, Tripling the Total of the Previous Two Years

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On Thursday, after the European market opened, the world’s largest eyewear manufacturer, EssilorLuxottica (EPA:EL), saw its shares surge by more than 5%. This came after the company disclosed that sales of the AI glasses launched in collaboration with American tech company Meta Platforms (NASDAQ:META) surged in 2025, signaling the increasing popularity of AI wearable devices among consumers.

EssilorLuxottica’s earnings report showed that its AI glasses shipments in 2025 exceeded 7 million units, more than three times the combined sales of around 2 million units in 2023 and 2024.

Since 2019, EssilorLuxottica has been a partner with Meta for AI glasses. The two companies first launched smart glasses under the Ray-Ban brand in 2021 and later released a second-generation upgrade in 2023. In June of the previous year, their partnership expanded to include more brands, with the introduction of Oakley smart glasses aimed at athletes.

As the AI wave continues to rise, the prospects for glasses as a platform for AI devices look increasingly bright. In September of last year, Meta introduced the next-generation Ray-Ban smart glasses, which can be controlled through gestures and neural technology via a wristband. One of the lenses is equipped with a small display screen.

Meta stated in January that due to “unprecedented” demand for the $799 Ray-Ban Meta smart glasses in the U.S. market, it delayed the planned international launch, originally set for early 2026.

Last month, there were market rumors that, as sales of the Ray-Ban smart glasses steadily increase, Meta and EssilorLuxottica are discussing plans to double the annual production capacity for AI glasses, aiming to increase it to 20 million units or more by the end of this year. The two companies have also discussed the possibility of exceeding 30 million units per year if demand proves strong enough.

It is worth noting that concerns over the impact of the AI glasses’ sales surge on profit margins led to a more than 20% decline in EssilorLuxottica’s stock price over the past three months. RBC Capital Markets analysts have pointed out that the gross margin of the Ray-Ban Meta smart glasses is much lower than that of the eyewear giant’s broader product line, and the company may need to rely on rising prices and shipment volumes to offset cost pressures.

The latest earnings report revealed that, influenced by U.S. tariffs and the expanded sales of AI glasses, EssilorLuxottica’s adjusted profit margin for fiscal year 2025 is projected to be 16%, a decrease of 70 basis points compared to 2024, based on constant exchange rates.

During the earnings call, Stefano Grassi, EssilorLuxottica’s Chief Financial Officer, told analysts, “I believe that, both internally and externally, we will have the capacity to meet the demand in the coming years, and we are planning based on this assumption, maintaining close cooperation with Meta.”

Although the company did not disclose specific production targets, Grassi added, “As we have seen in recent years, we do expect that as product innovation advances, the product price mix will continue to improve.”

In its financial guidance, EssilorLuxottica expects steady overall revenue growth over the next five years, with adjusted operating profit maintaining a similar growth pace.

Wall Street Analysts: The Selloff Has Gone Too Far—U.S. Software Stocks Have Fallen Into a “Golden Pit”

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Mark Luschini, Chief Investment Strategist at Janney Montgomery Scott, said: “It seems people now think software prices will fall in a straight line to zero. This one-sided trade is so obvious that it could actually set the stage for a rebound.”

These stocks are currently at historic lows. The forward price-to-earnings ratio of the S&P North American Software Index fell below 20 for the first time last week. Although it has since rebounded to around 23 times as stocks recovered somewhat, it remains well below its long-term average P/E of 34.

Jefferies studied the 64 software stocks under its coverage and found that “42% are trading at or near their historical undervaluation levels,” analysts led by Brent Thill wrote in a report to clients on Sunday.

Michael Toomey of Jefferies’ equity trading desk said, “I think software stocks are about to see a strong rebound.” Technical traders at BTIG expressed a similar view, writing in a report last week that software stocks are “on the verge of capitulation and should find a tactical bottom here.”

The rebound appears to have already begun. A closely watched ETF tracking the software industry fell 15% over eight consecutive trading days from January 26 to February 4, but has since rebounded 7.2%. According to Vanda Research, retail investor buying of the ETF “hit a record,” which Vanda described as “one of the most aggressive instances of dip-buying in tech stocks—particularly software stocks—that we have observed in our dataset.”

Although uncertainty still hangs over the sector, the selloff has been so broad that many companies previously expected to be long-term winners have not been spared. Companies most frequently cited by market experts include Microsoft (NASDAQ:MSFT), Snowflake (NYSE:SNOW), ServiceNow (NYSE:NOW), Salesforce (NYSE:CRM), and Palantir (NASDAQ:PLTR).

Data analytics software company Snowflake fell 27% in just six trading days from January 29 to February 5. However, the company holds a favorable position within the artificial intelligence ecosystem. Last week, Snowflake signed a $200 million multi-year partnership agreement with OpenAI and reached a similar deal with Anthropic PBC in December. In a February 5 report to clients, Thill wrote that Snowflake is “one of the clearest AI beneficiaries in the entire public software universe.” Institutions including UBS, Loop Capital, Wedbush, Bank of America, and DA Davidson have also spoken highly of Snowflake.

Michael Mullaney, Director of Global Market Research at Boston Partners, noted the weakness in Salesforce, ServiceNow (NYSE:NOW), and Workday (NASDAQ:WDAY). He said that if he were focused on growth stocks rather than value stocks, he would be buying these names on the dip.

Datadog (NASDAQ:DDOG) was also mentioned. Its shares surged 14% on Tuesday, marking the biggest gain since November, after the company reported strong results and issued better-than-expected revenue guidance.

AI coding—using artificial intelligence to write software code—is at the core of the market’s bearish sentiment toward software. If AI services offered by companies such as Anthropic or OpenAI can replace existing software packages, it would put significant pressure on the revenues, margins, and pricing power of the displaced companies. The recent stock market plunge was largely triggered by Anthropic’s launch of a legal workflow automation tool, followed by another tool focused on financial research. Earlier, an AI tool from Alphabet Inc. had also caused sharp declines in video game and mobile advertising stocks.

So far, this disruptive shift has largely been anticipated, but its magnitude remains difficult to quantify. Industry research forecasts that earnings growth for the software and services sub-sector will reach 14.1% in 2026. While this growth rate is below the broader technology sector’s expected 31.7% expansion—driven by the booming semiconductor industry—it exceeds the S&P 500 Index’s projected growth rate of 13.7%. Software sales are showing a similar trend.

Luschini of Janney said: “There’s a lot of speculation about what might happen, but so far nothing has actually happened. The market is trying to price in future risks, but at this point, that speculation seems more hypothetical than real.”

Even so, software skeptics do have some warning signs to point to. Shares of monday.com (NASDAQ:MNDY) fell 21% earlier this week after the company issued disappointing revenue guidance. S&P Global (NYSE:SPGI) also dropped 9.7% on Tuesday after releasing similarly disappointing earnings guidance.

However, most of these cases appear to be isolated. Data show that of the 10 software companies in the S&P 500 that have reported earnings so far this season, all 10 exceeded earnings expectations and eight beat revenue estimates. This outperformance rate exceeds that of the broader S&P 500, where 81% of companies have beaten earnings expectations and 66% have topped revenue forecasts.

Mullaney said such performance demonstrates that current trends are not severe enough to justify investors abandoning the software sector altogether. “A mere slowdown in earnings growth does not explain the magnitude of these stock declines,” he said. “However, I do believe that concerns about AI-driven disruption provide a reasonable justification for profit-taking.”

DRAM Supply Shortage Expected to Last Until 2028, Micron Target Price Raised by Deutsche Bank by Nearly 70%

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As the storm of rising storage prices intensifies, U.S. memory chip giant Micron Technology (NASDAQ:MU) has seen its target price raised once again.

Deutsche Bank significantly raised its target price for Micron Technology while maintaining its “Buy” rating on the stock. The bank’s analysts recently stated that the current memory cycle is “different from past cycles,” which could mean that Micron’s stock still has substantial room for growth.

Deutsche Bank analyst Melissa Weathers expects the supply shortage of dynamic random-access memory (DRAM) to last until at least 2027 or even 2028—especially as the artificial intelligence (AI) boom has led to a surge in demand for high-bandwidth memory (HBM).

HBM is made by stacking DRAM chips and is critical for advanced AI chips, such as those designed by NVIDIA (NASDAQ:NVDA). Micron, along with South Korea’s SK Hynix and Samsung Electronics, is considered one of the “Big Three” in the global HBM market, with the three companies collectively monopolizing more than 97% of the global HBM market share.

In a report released on Tuesday, Weathers noted that compared to traditional DRAM, HBM has approximately three times the “silicon density,” meaning it requires more wafers for chip cutting. She stated that this high density “is causing a supply shock that we believe has not been fully understood.” The supply tightness has enabled companies like Micron to raise prices and sign long-term contracts with customers.

At the same time, Weathers noted that new DRAM wafer plants will take at least two years to come online, and the expansion capacity of existing plants is limited, making it difficult to alleviate the demand pressure. However, she mentioned that as new production capacity gradually comes online next year, the supply constraints may ease.

Weathers believes these trends will create “a more structurally profitable environment” for Micron, raising the stock’s target price by a substantial 67% to $500—more than 30% above the latest closing price.

Deutsche Bank also raised its earnings per share (EPS) forecast for Micron’s fiscal year 2026 to $46.50, with the new target price based on about 11 times this number.

Micron’s stock fell 2.67% on Tuesday, continuing the downward trend from Monday, after reports surfaced that Micron’s competitor Samsung plans to begin mass production of next-generation HBM4 later this month, for use by NVIDIA (NASDAQ:NVDA) in its upcoming Vera Rubin graphics processing unit (GPU).

Over the past year, Micron’s stock has surged by an impressive 300%. Recently, several investment banks, including UBS, Mizuho, and HSBC, have raised their ratings on the stock.

Last month, during Micron’s first-quarter fiscal year 2026 earnings call, the company stated that all of its HBM capacity for 2026 had already been sold out, and it expects the total addressable market (TAM) for HBM to reach $100 billion by 2028 (up from $35 billion in 2025).