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

Meta Platforms (META) is in advanced talks to deploy Google’s Tensor Processing Units (TPUs) in its data centers, a move that could challenge Nvidia’s (NVDA) dominance in AI chips [1,2,3]. Alphabet (GOOG) shares rose ~2% to $327 in after-hours trading following the news, while NVDA dropped ~2.05% AH [1].

GOOG’s recent performance: The stock has rallied ~52% since mid-September, fueled by positive reception of its Gemini 3 AI model and now the TPU partnership talks [1]. On November 24, GOOG closed +2.4% at $318.47 with volume 22% above the 30-day average [0]. The next day, it hit a new 52-week high of $328.67 before closing down 0.97% at $323.64, still higher than pre-event levels [0].

NVDA’s position: While NVDA closed +1.7% at $182.55 on November24, it faced pressure the next day—opening at $174.91 and closing at $177.82 (+1.66% that day but below the prior close) [0]. NVDA remains the leader in AI training chips but is increasingly competing with custom chips from cloud providers like Google [4].

1. Google’s TPU Traction
   : The potential Meta deal validates Google’s TPU capabilities in the inference market, directly challenging NVDA’s position [2,3].
2. Cost Efficiency for Meta
   : If finalized, Meta could achieve significant cost savings by reducing reliance on NVDA GPUs, potentially boosting EPS (though unconfirmed) [1].
3. FOMO Dynamics
   : GOOG’s ~100% rally in 6 months has led to investor FOMO, as noted in Reddit discussions [1].

• GOOG Revenue Diversification
  : TPU sales to Meta would expand Google’s revenue beyond search and cloud [3].
• Meta Cost Savings
  : Reduced GPU expenses could improve Meta’s profitability [1].

• Unconfirmed Deal
  : Failure to finalize the partnership could lead to a correction in GOOG’s stock price [0].
• NVDA Market Share Erosion
  : Growing adoption of custom chips by cloud providers may erode NVDA’s market share over time [4].
• FOMO-Driven Overbuying
  : GOOG’s rally may have priced in optimistic expectations, increasing the risk of overbuying based on unconfirmed news [1].

• GOOG
  : Nov24 close +2.4% ($318.47), 52-week high $328.67 (Nov25), volume 55.31M (22% above average) [0].
• NVDA
  : Nov24 close +1.7% ($182.55), Nov25 close $177.82 (+1.66% that day but below prior close), volume 256.62M (15% above average) [0].
• Event Status
  : Talks are unconfirmed; deployment could start in 2027 if finalized [5,6].

Note: This analysis does not constitute investment advice.