Recent AI announcements from Google, Open-AI and Meta have started the race to deliver AI to the mass market, analysts at Mizuho said in a note Tuesday.
The investment firm believes that mobile devices are the form factor for consumer AI due to their large scale, with over 5 billion users.
Ease of use is one of the primary advantages of gaining mass adoption, although Mizuho notes that emerging form factors include mixed-reality glasses and VR Goggles.
"AI agent on the mobile phone is the entry point for consumer adoption, and interoperability with mobile apps is critical for seamless experience," writes Mizuho.
In addition, the analysts state that "LLMs need to reside locally to reduce latency, lower inferencing costs, and provide reinforcement training and data privacy."
"For consumer AI to scale, we see a convergence between LLMs, Agents, OS and device," adds the firm. With that in mind, Mizuho's top internet names for consumer AI to mobile are Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN).
Furthermore, to achieve AI on device, they expect the infrastructure to be optimized with accelerated capex cycle. As a result, their top semiconductor names are Micron Technology (NASDAQ:MU), Qualcomm (NASDAQ:QCOM) and Arm Holdings (NASDAQ:ARM).