Shares of Nvidia (NVDA) fell on Tuesday after The Information reported that Meta (META) is considering using chips designed by Google (GOOGL). According to the report, Google is accelerating its push to compete directly with Nvidia in the AI semiconductor market. Following the news, NVDA stock fell 4.4% in premarket trading, while GOOGL climbed 4.5%.
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Meta Could Switch to Google AI Chips
The reports stated that Meta may start using Google’s Tensor Processing Units (TPUs) in its data centers in 2027 and could also rent TPUs from Google Cloud next year.
For context, Google’s TPUs are custom chips built for AI and machine learning. Experts note that TPUs’ custom design gives Google an edge over rivals, allowing it to offer customers a highly efficient solution for AI tasks. If Meta adopts TPUs, it would be a significant win for Google and confirm the strength of its AI chip technology.
Meanwhile, shares of Broadcom (AVGO), which assists Google in designing its TPUs, rose more than 2% in premarket trading.
Is Nvidia at Risk?
Nvidia continues to lead the market with its GPUs, which serve as the backbone of much of the AI infrastructure. However, companies building AI systems are increasingly looking to diversify their chip supply to reduce reliance on Nvidia.
While Nvidia is expected to maintain its dominance for the time being, Google’s TPUs add new competition to the AI chip market.
Notably, Meta remains one of the largest investors in AI infrastructure and is projecting capital expenditures of $70–$72 billion this year. A potential shift by Meta to TPUs would represent the most significant move yet by a major hyperscaler away from Nvidia’s high-end GPUs.
Is Nvidia a Buy or Sell Stock?
Broadly, Nvidia stock has surged by 36% year-to-date, driven by renewed enthusiasm for AI infrastructure and its dominance in high-performance chips. The company hit a record market capitalization of $4 trillion, reflecting its critical role in the AI boom. Looking ahead, analysts remain bullish on Nvidia, but the rally faces risks such as U.S.-China export controls, AI bubble concerns, and growing competition from rivals.
According to TipRanks, NVDA stock has a Strong Buy consensus rating based on 39 Buys, one Hold, and one Sell assigned in the last three months. At $257.26, the Nvidia average share price target implies a 41% upside potential.
