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Meta is jumping into the octagon in a big way — and it could help advance the company’s push into being more than just a social media powerhouse. The news TKO Group’s UFC has entered into a strategic partnership with Meta Platforms to enhance fan engagement through the tech giant’s platforms, the mixed martial arts organization said Wednesday. A key part of the announcement: Meta will work with UFC to “creatively use their groundbreaking [Meta Ray-Ban] AI glasses in compelling ways at UFC events,” according to a press release. Additionally, Meta’s text-based platform Threads will become UFC’s official social media partner and feature exclusive original content — just a few months after Meta started testing ads on the site . UFC, which holds its fights in an octagon-shaped cage, says it has more than 700 million fans worldwide and more than 300 million social media followers. Meta boss Mark Zuckerberg, who started Brazilian Jiu-Jitsu training during the Covid lockdown, is a longtime MMA fan. This announcement comes as Meta is readying what a Bloomberg News report described as a higher tier of Ray-Ban smart glasses with a built-in screen, which could launch by the end of this year. The price tag on these souped-up frames will be more than $1,000 and could sell for up to $1,400, the Bloomberg report said. Shares of Meta were lower by nearly 1% Wednesday. Big picture Zuckerberg has a long-term vision that smart glasses could be the next computing platform , much like the smartphone ushered in the mobile computing era. Both pieces of news — bringing the glasses to UFC and a premium version with a screen — reflect Zuckerberg’s priorities. It also deepens Zuckerberg’s ties to Dana White, the president and CEO of UFC who also is on Meta’s board of directors. White, a friend of President Donald Trump , joined the Meta board a few weeks before Trump took office in January. Meta’s Ray-Ban smart glasses have gained consumer traction, but they’re far from achieving mass adoption and being a driver of the company’s overall growth. Meta has sold more than 2 million of their smart glasses — a collaboration with Ray-Ban’s parent company EssilorLuxottica — since hitting the market in late 2023. The company doesn’t report the profit or loss of the glasses, but the impact on revenue is likely minimal at this point. The Facebook and Instagram parent’s strength remains in its core advertising business, where it generated 98% of its revenue in 2024. Still, the glasses already have a strategic benefit to the company’s major bet on artificial intelligence. Meta’s Ray-Ban smart glasses integrate Meta AI, its AI chatbot, to respond to users in a natural way. The company has been spending billions of dollars on its AI ambitions, both to boost engagement on its apps and make them more appealing to advertisers through improved targeting capabilities. The smart glasses and the Meta AI chatbot, powered by its open-source Llama large language models, are also part of that strategy. Later this year, Meta is expected to release a new version of its Llama LLM that can power so-called AI agents, widely seen as the next phase of the technology. Fellow Club name Salesforce has bet big on AI agents, which can execute various tasks without human intervention. Meta has “all the building blocks to emerge as a leading player in the AI agent era,” analysts at Cantor Fitzgerald said in a note to clients Tuesday. As this shift continues in the years ahead, analysts are bullish on Meta emerging as a leading player in the space despite the competitive landscape. The firm has a buy-equivalent outperform rating on the stock and a price target of $790 a share. Bottom line Meta’s efforts to push its smart glasses to wider audiences such as the UFC play a significant role in the company’s broader ambitions to dominate the wearable tech market, particularly around virtual and augmented reality. Meta’s smart glasses are a notable win for Meta’s Reality Labs division, which is home to its VR and AR hardware and software pursuits, along with its metaverse initiatives more broadly. The UFC collaboration, given the popularity of that sport, could further help the adoption of an already popular consumer product. At the same time, the glasses are not yet meaningful revenue contributors, compared with its massive social media advertising business. They remain just a small part of our Meta investment case, which centers on the company’s dominant ad business along with the successful monetization of its AI initiatives. That’s what makes it the tech titan it is today, and it is why we’re long-time holders of the stock. Of course, we would be thrilled if smart glasses were to become a needle-mover sooner than we expect and to see losses in its Reality Labs metaverse division narrow. We maintain our 2 rating on Meta stock, meaning we would wait to buy on a pullback, and reiterate our price target of $750 per share. (Jim Cramer’s Charitable Trust is long META. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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UFC CEO Dana White, left, and Meta CEO Mark Zuckerberg attend the UFC 300 event at T-Mobile Arena in Las Vegas, Nevada, April 13, 2024.
Jeff Bottari | Ufc | Getty Images
Meta is jumping into the octagon in a big way — and it could help advance the company’s push into being more than just a social media powerhouse.
