Nvidia today, Nov 26: Shares Slip 2.6% as Google Expands AI Push

We start with a sharp turn in the market: Nvidia shares dropped 2.6% today. The slide comes just as Google moves to expand its own AI‑chip business, a push that is rattling confidence in Nvidia’s place atop the AI hardware world. See why it matters, and what could lie ahead.

Nvidia’s Stock Performance

On Tuesday, Nvidia shares closed down 2.6%. Even after-hours trading pushed the drop a bit further. This came against a backdrop of broader gains: major indexes like the NASDAQ Composite and Dow Jones Industrial Average moved higher the same day. That contrast,  Nvidia down while the rest of the market rises, highlights how much investor sentiment around AI‑chip competition matters these days.

Factors Behind the Decline

At the heart of the drop is a major report: according to a recent leak, tech giant Meta Platforms may shift billions of dollars in future AI spending toward Google’s custom AI chips. This shift isn’t minor. The idea is that Meta would start using Google’s chips, called tensor processing units (TPUs), in its data centers from 2027. For investors, that signals a potential weakening in demand for Nvidia’s GPUs, which have long powered many of the world’s biggest AI models and data centers.

On top of that, some investors seem to be taking profits after Nvidia’s strong run earlier this year. When there’s uncertainty about future demand, due to rising competition, declines can happen fast.

Google’s AI Expansion: What’s Changing

Google is reportedly stepping up its AI‑chip game. Rather than simply offering its TPUs through its own cloud services, the company is now pushing to sell or lease them directly to large firms like Meta. That’s a big shift. If companies like Meta adopt Google’s TPUs at scale, it could reduce their reliance on GPUs from Nvidia. According to the report, Google’s move could capture up to 10% of Nvidia’s annual revenue.

For Google, this is part of a broader push to become a serious player in AI infrastructure,  not just a provider of cloud services, but a rival to traditional chip..

Nvidia’s Position in the AI Market

But it’s not all bleak for Nvidia. The company has built a massive lead in AI hardware over the years. It’s GP, especially the newer gegenerationnpower many of the largest AI models and data centers. This strong ecosystem, software support, and hardware flexibility remain major advantages. Moreover, while TPUs are optimized for specific AI tasks, GPUs are much more flexible. They can handle not only AI training and inference but also graphics, video processing, gaming, and many other workloads. That flexibility gives Nvidia a broad base, beyond just large AI companies.

Nvidia also made a strong financial showing recently, with rising data-center revenue and a reputation as a leader in AI chips.

Implications for Investors and Tech Sector

For investors, the slide in Nvidia’s shares serves as a reminder: even industry leaders can face serious disruption. If more big customers switch to alternative hardware like Google’s TPUs, demand for GPUs could slow. But the situation also opens potential opportunities. If this dip creates undervalued entry points and Nvidia continues to innovate,  refining its chips, expanding product lines, and leveraging its ecosystem, long-term investors might find value.

On a broader scale, the shift signals a maturing in the AI hardware market. Competition is rising. Specialised AI chips, more efficient and purpose-built, are gaining traction. That could drive a shift away from one-size-fits-all GPUs and push the industry toward more diversity in hardware.

 Conclusion

Nvidia’s 2.6% slide reflects a growing wave of change in the AI hardware world. With Google expanding its chip business and major clients like Meta considering switching away from GPUs, the competition is real, for the first time in a long time. Still, Nvidia’s strength lies in its flexibility, its strong ecosystem, and its leading position. The coming years will test whether the company can hold ground or if we’re witnessing the start of a major reshuffle in how AI gets powered. For investors and tech watchers, this moment deserves careful attention.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.