Meta Platforms is facing renewed legal pressure after a lawsuit linked to its smart glasses business added a new layer of risk for investors assessing the company’s recovery and valuation.

The case, filed in the United States, challenges Meta’s handling of data collected through its Ray-Ban Meta smart glasses, alleging that the devices may capture images and audio in ways that expose users and bystanders to privacy violations without adequate consent.

The lawsuit comes at a sensitive moment for Meta, as the company has sought to rebuild market confidence following a sharp rebound in advertising revenue, disciplined cost controls and growing optimism around artificial intelligence-driven products.

While Meta has defended its smart glasses as compliant with existing privacy laws and emphasised that recording indicators are clearly visible, the litigation introduces the possibility of regulatory scrutiny, fines or changes to product design that could slow momentum in its wearables strategy.

Analysts note that smart glasses are a relatively small part of Meta’s overall revenue today, but they are viewed internally as a long-term growth pillar tied to the company’s broader vision for augmented reality and immersive computing.

The legal action therefore raises questions about execution risk and future compliance costs at a time when Meta shares are still regarded by some market participants as undervalued relative to peers, given strong cash flow generation and improving margins.

Investors are weighing whether the lawsuit represents a manageable legal distraction or a signal of deeper challenges facing consumer adoption of always-on wearable technology.

Meta has said it intends to contest the claims and continue working with regulators, even as the case adds short-term uncertainty to a stock that has otherwise been regaining favour on Wall Street.