The rapid growth of the market for smart glasses is set to accelerate further, providing a boost for prime beneficiary EssilorLuxottica SA, HSBC Holdings Plc analysts said.

Analysts including Anne-Laure Bismuth increased their estimate of the industry’s size by a third to $200 billion by 2040, reflecting the early success of glasses made by EssilorLuxottica in collaboration with Facebook parent Meta Platforms Inc.

They foresee a more than 1,800% jump in smart glasses users to 289 million by the end of the next decade, up from 15 million in 2025.

“The more competition, the more likely this market will gain critical mass and attract R&D efforts to the benefit of all players,” Bismuth wrote in a note. HSBC upgraded the stock to buy after having a hold recommendation for almost two years. The shares rose as much as 2.9%.

With sales of Ray-Ban Meta frames taking hold, the companies are discussing potentially doubling production capacity for AI-powered smart glasses by the end of this year, in a bid to capture growing demand and head off rivals, Bloomberg News reported this week.

HSBC kept a buy rating on Meta, which it thinks can play a major role in the smart glasses computing platform, and leverage its services with top-end hardware. The bank expects Apple Inc., Samsung Electronics Co., or Amazon.com Inc. to join the smart glasses race in 2026-27. 

“The more competition, the more likely this market will gain critical mass and attract R&D efforts to the benefit of all players,” the analysts said.