NVIDIA (NVDA) vs Google TPUs: Investment Context Amid Competition

The analysis is based on a Reddit discussion (user-provided) dated 2025-11-28 (EST) exploring whether NVIDIA remains a viable investment amid competition from Google’s Tensor Processing Units (TPUs). Key arguments include:

• Pro-NVIDIA
  : Undervalued due to ecosystem leadership; Blackwell/Rubin chips are more cost-effective than TPUs; CEO Jensen Huang’s track record of innovation.
• Anti-NVIDIA
  : PE ratio (~50x) is overvalued for a mature company; TPUs could reduce margins from 80% to 30%; TPUs are more power-efficient (2x performance per watt).
• Alternative
  : AMD is a better option due to its early growth cycle [0].

• NVIDIA’s stock closed at $176.51 (-2.08% day-over-day) on 2025-11-29, underperforming the Technology sector (+0.53% day-over-day) [0]. This may reflect investor concerns about Meta’s exploration of TPUs [6].
• AMD’s stock rose 1.53% day-over-day, outperforming NVDA, but its PE ratio (106.98x) is more than double NVDA’s (43.29x) [0].

• NVIDIA’s 1-month return is -14.75%, but YTD returns remain strong (+27.62%) [0]. Bank of America projects NVDA’s market share will decline from 85% to 75% due to TPU competition, but it will still dominate the AI chip market [6].
• Blackwell chips are in full production, with demand exceeding supply [1]. NVIDIA expects $500B in Blackwell/Rubin sales by end-2026 [7].

• NVIDIA’s ecosystem (CUDA platform) and product pipeline (Rubin chips in 2026/2027) will sustain its leadership [1]. However, TPUs could pose a long-term threat if they gain broader adoption among cloud providers [2].

Metric	NVIDIA (NVDA)	AMD (AMD)	Source
Current Price	$176.51	$217.52	[0]
PE Ratio (TTM)	43.29x	106.98x	[0]
Net Profit Margin	53.01%	10.32%	[0]
Analyst Target Price	$250 (+41.6% upside)	$300 (+37.9% upside)	[0]
Blackwell/Rubin Sales Projection	$500B (2025-2026)	N/A	[7]

• Directly Impacted
  : NVIDIA (NVDA), AMD (AMD), Google (GOOG) (TPU maker).
• Related Sectors
  : Semiconductors (Technology), Data Center Infrastructure, Cloud Computing.
• Upstream
  : TSMC (chip manufacturing), SK Hynix/Micron (HBM suppliers).
• Downstream
  : AWS, Azure, Google Cloud (cloud providers), OpenAI/Anthropic (AI startups).

• Need to monitor Rubin chip’s actual performance vs TPUs when launched (2026/2027) [1].
• Track Meta’s adoption rate of TPUs and its impact on NVDA’s sales [6].
• Verify NVIDIA’s gross margin recovery to mid-70s by H2 2026 [1].

• Bullish
  : Strong ecosystem moat; robust demand for Blackwell/Rubin; attractive valuation relative to AMD; high analyst upside [0][7].
• Bearish
  : TPU competition reduces market share/margins; short-term margin pressure from Blackwell ramp; regulatory risks (China export controls) [1][6].

• Users should be aware that Google’s TPUs may reduce NVIDIA’s market share and margins, as projected by Bank of America [6].
• NVIDIA’s gross margins will dip to low-70s in the short term due to Blackwell’s ramp, impacting near-term earnings [1].

1. Rubin chip launch (2026/2027) and its cost-effectiveness vs TPUs [1].
2. TPU adoption by major cloud providers (Meta, AWS) [6].
3. NVIDIA’s gross margin trends (recovery to mid-70s by H22026) [1].
4. AI demand growth and regulatory changes in semiconductor exports [0].

: All data is as of 2025-11-29 UTC. Market conditions may change rapidly.