NVIDIA (NVDA) Investment Analysis Amid Google TPU Competition: Ecosystem Lock-In vs Margin Risks

On November 28, 2025 (EST), a Reddit discussion debated NVIDIA (NVDA)’s investment merit amid Google Tensor Processing Unit (TPU) competition [0]. This followed news of Meta (META) in advanced talks to adopt TPUs instead of NVDA GPUs, contributing to NVDA’s 2.08% drop to $176.51 and a 14.75% monthly decline [0][2]. NVDA holds a 92% data center GPU market share and a $500B Blackwell/Rubin order backlog through 2026 [4][6], but Google’s TPUs are 2x cheaper for inference workloads [3]. Contrary to Reddit’s claim of a ~50 P/E ratio, NVDA’s current P/E is ~43.69 with a net margin of 53.01% [0][1].

Cross-domain connections: TPU competition benefits Google (GOOG) via TPU growth, Meta via cost savings, and AMD via potential market share gains [3][5]. Deeper implications: NVDA’s CUDA ecosystem lock-in is a strong moat but not unbreakable—Meta’s potential switch shows large customers may prioritize cost over lock-in [2]. Margin compression (from 53% to lower) is a bigger risk than obsolescence, as TPUs reduce NVDA’s pricing power [3].

1. Margin Compression
   : TPU competition could reduce NVDA’s high net margin (53.01%) if adoption increases [3].
2. Revenue Loss
   : Meta’s switch (if finalized) could impact up to 10% of NVDA’s annual revenue [5].
3. Valuation Sensitivity
   : High P/E (~44) makes NVDA vulnerable to growth slowdowns [0].

1. Strong Backlog
   : $500B in Blackwell/Rubin orders provides revenue visibility through 2026 [4].
2. Analyst Upside
   : Consensus target of $250 represents a +41.6% upside from current price [1].

Users should monitor Meta’s final TPU decision and NVDA’s margin trends in upcoming quarters, as these factors could significantly impact NVDA’s financial performance [2][3].

Critical data points for decision-making:

• NVDA current price: $176.51, P/E ratio: ~43.69, net margin:53.01% [0][1]
• Backlog: $500B in Blackwell/Rubin orders through 2026 [4]
• Market share:92% of data center GPU market [6]
• TPU competition: 2x cheaper for inference workloads [3]
• Meta’s potential impact: Up to10% of NVDA’s annual revenue [5]
• Analyst consensus target: $250 (+41.6% upside) [1]

Monitoring factors: Meta’s final chip decision, NVDA’s quarterly results, TPU customer wins, Blackwell/Rubin delivery timelines.