Investing.com -- 2025 could emerge as a potential turning point for consumer-facing AI applications, marking a shift from the infrastructure-led boom to widespread integration of AI at the application layer, according to Piper Sandler analysts.
The analysts said in a Monday note that the Consumer AI market could grow from $15 billion in 2025 to more than $100 billion by 2030, driven by lower inference costs and rapid user adoption.
From an investment standpoint, Piper Sandler highlights seven stocks—Amazon.com Inc (NASDAQ:AMZN), Duolingo (NASDAQ:DUOL), Google (NASDAQ:GOOGL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), Opera (NASDAQ:OPRA), and Reddit Inc (NYSE:RDDT)—as key beneficiaries of this “next major AI wave.”
These companies are seen as well-positioned due to their scale, user reach, and investments in AI integration.
According to the note, entrenched tech giants have a considerable edge. “The public company scale advantage is difficult to overstate,” Piper wrote, citing combined annual revenue of around $1.5 trillion and over $100 billion invested in AI annually by large-cap platforms.
Google, Meta, and other hyperscalers can push new AI models to billions of users through existing platforms, creating a high barrier to entry for newer players.
“Distribution is another key advantage for entrenched players who can roll out new AI models to billions of users globally. With consumer internet screen time well established at 4+ hours/day, new mobile apps face a wall of existing attention,” analysts said.
Piper Sandler outlines several key trends shaping the consumer AI landscape. The firm notes that AI-specific hardware is increasingly being built into devices, which is improving user experience while also helping reduce delivery costs.
The U.S. remains the most active market for AI adoption, although China is emerging as a strong competitor. In terms of demographics, usage of ChatGPT continues to skew toward younger users, particularly men aged 18 to 24.
Looking at what differentiates the leading consumer AI applications, Piper highlights several common factors, including strong distribution networks, a clear focus on product quality and user experience, recognizable branding, and leadership within a defined niche.
