Oct 17 (Market Insider) – EssilorLuxottica (ESLX.PA), the maker of iconic brands like Ray-Ban, has seen its shares surge to an all-time high, driven by explosive investor interest in its AI-powered Ray-Ban Meta (META.O) smart glasses. The Paris-listed group’s stock jumped 14% on Friday, adding nearly $20 billion to its market capitalization and marking its biggest single-day gain since 2008.
The market excitement follows the company’s Thursday report of stellar third-quarter performance, which saw sales grow 11.7% from a year ago to €6.9 billion ($8.1 billion). These results beat analyst expectations and represent the company’s best-ever quarterly performance, largely fueled by the strong demand for its smart glasses developed in partnership with Meta.
AI Glasses: From Niche to Material Growth Driver
While the smart glasses business has historically been a small fraction of EssilorLuxottica’s total revenue, it has become a central focus for the market. Chief Financial Officer Stefano Grassi confirmed that the AI-powered glasses contributed over four percentage points to the robust sales growth. The unexpected demand has prompted the company to accelerate its 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 stated on Thursday.
- Market Impact: The surge lifted EssilorLuxottica’s market capitalization to €126.5 billion.
- Sector Ripple Effect: The move also propelled the European luxury benchmark Stoxx Europe Luxury 10 up over 7% on the week—its largest weekly gain since January.
Analysts are increasingly bullish on the future of the category. Barclays analysts, for instance, have predicted that smart glasses could be the most disruptive innovation since mobile phones, forecasting 60 million unitssold globally by 2035. Echoing this sentiment, J.P. Morgan analysts now view the smart glasses as a “material growth driver.” Equita analysts have upgraded their annual revenue forecast for wearables, expecting an impact of about €1 billion on the group’s sales this year.
Reigniting a ‘Dead Category’ and Luring Rivals
The emerging success of the Ray-Ban Meta glasses has effectively reignited the eyewear computer category, which had previously been abandoned by tech giants like Google (GOOGL.O) and Microsoft (MSFT.O). Meta’s strategy of combining upgraded cameras and generative AI features with Ray-Ban’s design expertise has proven successful, creating a product priced between $379 and $799 for the new flagship version with a built-in display.
This success is now drawing big tech rivals back:
- Google and Samsung are developing glasses based on the Android XR platform.
- Apple (AAPL.O) is also reportedly working on its own smart glasses project.
“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,” Equita analysts noted, underscoring the shift in market perception for EssilorLuxottica.
