NVIDIA (NVDA) Investment Prospects Amid Google TPU Competition and Blackwell Chip Rollout

On November 28, 2025 (EST), a Reddit discussion debated NVIDIA’s investment merit in the context of Google’s Tensor Processing Units (TPUs). Key arguments included pro-NVIDIA claims (ecosystem lead, Blackwell/Rubin cost-effectiveness) and anti-NVIDIA concerns (high valuation, margin risks from TPU competition). The discussion concluded with a question on NVIDIA’s buy case amid TPU traction. [1]

• Stock Performance
  : NVIDIA closed at $176.51 on November 29, 2025, down 2.08% daily, while the tech sector rose by 0.53%—indicating stock-specific concerns. [0][2]
• Competitor Reaction
  : AMD (Reddit’s cited alternative) rose by 1.53% the same day, aligning with bullish sentiment for non-NVIDIA AI chips. [0]
• News Context
  : Meta is reportedly considering Google’s Ironwood TPUs, which could reduce NVIDIA’s revenue from a major customer. [3]

• Valuation
  : NVIDIA’s PE ratio is 43.69 (lower than Reddit’s ~50 claim), but still high for a mature company. [0]
• Price Trend
  : 30-day price change: -1.76% (daily volatility: 2.59%). [2]
• Financial Metrics
  : Q3 2025 data center revenue: $30.8B (up 112% YoY); GAAP gross margin:74.6% (expected to drop to low-70s as Blackwell ramps, then recover to mid-70s). [0][2]
• Product Performance
  : Blackwell chips deliver a2.2x leap over Hopper in MLPerf benchmarks;64 Blackwell GPUs replace256 H100s for GPT-3 (4x cost reduction). [0]
• Market Share
  : NVIDIA holds ~80-90% of the AI GPU market, despite TPU competition. [3]

##4. Information Gaps & Context for Decision-Makers

• Critical Gaps
  : 1. Exact cost-performance comparison between NVIDIA Blackwell/Rubin and Google Ironwood TPU;2. Actual TPU adoption rate by major customers (e.g., Meta’s usage volume);3. Long-term margin impact of TPU competition.
• Multi-Perspective View
  : Bull Case: Ecosystem lock-in (CUDA), Blackwell’s performance, trillion-dollar data center demand. [0] Bear Case: Margin pressure, valuation risks, customer shift to TPUs. [1][3]

##5. Risk Considerations

• Margin Pressure
  : NVIDIA’s gross margin is expected to drop to low-70s as Blackwell ramps, which could impact profitability if competition intensifies. [0]
• Competition Risk
  : Adoption of TPUs by major customers like Meta may reduce NVIDIA’s market share and revenue growth. [3]
• Valuation Risk
  : A PE ratio of ~44 is high relative to mature tech companies; any AI demand slowdown could lead to valuation contraction. [0]

Disclaimer: This report is for informational purposes only and not investment advice.