Meta currently dominates the market. Its Ray-Ban smart glasses accounted for over 60% of total shipments in 2024. Yet the company has only scratched the surface of what it hopes to accomplish. Last year, Zuckerberg announced Orion, smart glasses that blend artificial intelligence and augmented reality (AR). The product will not hit the market for several years but could be revolutionary.
Orion overlays the physical world with holographic screens, so someone wearing the glasses could browse the internet, stream media content, and communicate face to face with other people. Orion can also query the conversational assistant Meta AI, so the wearer could ask for information on anything they see in the real world. The glasses are controlled with eye movements, hand movements, and a wrist-worn neural interface.
Astronomical costs have so far prevented Meta Platforms from commercializing Orion, but the company is working to address those issues, and Zuckerberg hopes the glasses will hit the shelves within a few years. However, the stock is worth buying right now.
Wall Street expects earnings to increase at 17% annually during the next three years. That makes the current valuation of 27 times earnings look reasonable.
Amazon operates in several industries but has a particularly strong presence in three: e-commerce, digital advertising, and cloud computing. The company in one way or another is using artificial intelligence to unlock efficiencies in all three areas, but innovations in the retail segment are particularly promising because it's both the largest and least profitable part of the business.
Morgan Stanley analysts estimate shipping and fulfillment costs alone consume about 36% of retail revenue, but Amazon is building about a thousand generative AI applications to reduce those expenses, including tools to optimize seller listings, demand forecasting, inventory placement, and last-mile delivery routes.
Also, Amazon is the largest manufacturer and operator of industrial mobile robots -- more than 1 million robots roam its warehouses -- and a recently introduced AI model called DeepFleet is helping those autonomous machines navigate fulfillment centers more quickly. The company is also developing an AI framework that will let human workers engage robots with natural language.
Even more groundbreaking, The Information reported in June that Amazon was preparing to test humanoid robots for package delivery. Initially, the company hopes robots will ride with human drivers in Rivian electric vans and hop out to carry packages to doorsteps. But the company could eventually put robots in self-driving cars developed by its subsidiary Zoox.
Importantly, most innovations I've discussed will forever remain behind the scenes. Most consumers will never see the AI tools and robots that power Amazon warehouses. However, those technologies could make Amazon more profitable in the years ahead. That makes the stock a compelling long-term investment despite its somewhat expensive valuation of 35 times earnings.
Before you buy stock in Meta Platforms, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Meta Platforms wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $661,220! Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,114,162!
Now, it's worth noting Stock Advisor's total average return is 1,069% -- a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
Trevor Jennewine has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.
Billionaires Buy 2 Monster AI Stocks Shaping the Future of Technology was originally published by The Motley Fool