NVIDIA Investment Considerations Amid TPU Competition and Meta's Potential Adoption of Google Chips

Meta Platforms’ advanced talks to use Google’s TPUs for AI workloads triggered a $250B decline in NVIDIA’s market value [2][3]. NVIDIA’s stock is at $180.26 (down 10.33% month-over-month) with an 88.3% revenue dependency on data centers [0]. Reddit discussions highlight conflicting views: bullish arguments emphasize NVIDIA’s CUDA ecosystem lead and cost-effective Blackwell/Rubin chips (claimed faster than TPUs), while bearish points cite its ~44.62x P/E ratio and margin pressure risks from TPU competition [1]. AMD, an alternative AI chip provider, saw a 3.93% day-over-day gain but has a higher ~112x P/E ratio [0].

1. NVIDIA’s relative valuation is more attractive than AMD’s (lower P/E ratio) despite short-term volatility.
2. Data center revenue dominance (88.3%) makes NVIDIA vulnerable to TPU adoption by major customers like Meta.
3. Analyst consensus (target $250, ~38.7% upside) contrasts with short-term investor concerns, indicating mixed sentiment [0].
4. NVIDIA’s CUDA ecosystem moat may buffer against TPU competition in the long term [1].

• Risks
  : Margin erosion if TPUs gain traction (current net profit margin:53.01%) [0]; potential loss of Meta as a customer (impacting data center revenue) [3]; high ~44x P/E ratio relative to industry averages.
• Opportunities
  : Blackwell chip adoption; ecosystem lead (CUDA); analyst upside of ~38% [0].

Critical metrics: NVIDIA’s price ($180.26), P/E ratio (~44.62x), net profit margin (53.01%), analyst consensus target ($250). Conflicting arguments: bullish (ecosystem lead, cost-effective chips) vs bearish (valuation, margin risks). Data gaps: independent benchmarks for Blackwell vs Ironwood TPUs; Meta’s TPU deal details [1][2][3].

: This analysis is for informational purposes only and does not constitute investment advice.