The wearables technology market is expanding, with Meta (META) recently unveiling new AR glasses named "Orion." RBC Capital Markets equity analyst Brad Erickson shares his outlook on how this kind of spending could impact big tech companies.

Erickson believes that tech giants like Meta "are going to keep spending money on this stuff." With Meta revealing only a prototype to investors at it's Connect Conference, Erickson sees this as a positive sign for the company's upcoming quarterly results. Erickson notes a strong correlation between AI spending and revenue growth, stating, "management recognizes that they can't just go spend an unlimited amount of dollars unless the business is growing fast enough."

"So long as those fundamental trends are good, it gives them license to go out and keep spending on this, and thus we kind of view the spending as the tip of the spear indicator. If you were to detect any sort of pullback, it probably comes from the fact that maybe revenue growth is slowing. We haven't seen that yet," Erickson explains.

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This post was written by Angel Smith