Meta's Potential Google TPU Adoption: Impact on GOOG and NVDA Stocks

Meta Platforms (META) is in advanced talks to deploy Google’s Tensor Processing Units (TPUs) in its data centers starting in 2027, with potential rental agreements as early as 2026 [1]. This news triggered after-hours gains for Alphabet (GOOG) (~2%) and losses for NVIDIA (NVDA) (~2%) [0]. GOOG has rallied ~85.9% over the past six months (May-Nov 2025) to $318.47, reflecting growing investor confidence in its AI chip capabilities [0]. NVDA, which holds over 90% market share in AI accelerators, faces risk of losing Meta—one of its largest customers planning $72B in AI infrastructure spending in 2025 [2,3].

1. AI Chip Competition
   : Google’s TPUs are emerging as a credible alternative to NVDA’s GPUs, especially for inference workloads (Meta’s primary use case) [4]. This signals a shift toward custom ASICs, eroding NVDA’s near-monopoly [3].
2. Cost Savings for Meta
   : Adopting Google’s TPUs could lead to significant cost savings for Meta, potentially boosting its EPS by reducing reliance on NVDA’s pricier GPUs [1].
3. Market Sentiment
   : While Reddit users expressed FOMO for GOOG shares [1], real-time data shows GOOG’s price has stabilized (minor 0.12% decline as of Nov 28), indicating the market has priced in the news without excessive speculation [0].

• GOOG
  : Opportunity to gain share in the AI chip market via Meta’s potential adoption, but faces execution risk (delivering TPU performance and scalability to retain Meta) [4].
• NVDA
  : Risk of market share erosion if Meta and other large customers diversify to non-NVDA chips, though the 2027 start date means no immediate material impact [2,5].
• Risk Warning
  : NVDA’s reliance on a small number of large customers (like Meta) exposes it to significant revenue risk if customers shift suppliers [5].

• GOOG
  : 6-month gain of ~85.9%, market cap $3.86T, 52-week high $328.67 [0].
• NVDA
  : Recent 2.08% drop, market cap $4.30T, 52-week high $212.19 [0].
• Meta
  : $72B AI infrastructure budget, potential shift to Google TPUs [2].
• Market Share
  : NVDA holds ~90% of AI accelerator market, facing competition from Google’s TPUs [3].