Wedbush said Google’s Tensor Processing Units, or TPUs, are not shaking Nvidia’s (NVDA) CEO Jensen Huang, following reports that Meta Platforms (META) is in talks to spend billions on the Alphabet (GOOGL) (GOOG) unit’s AI chips.
“Google’s TPU chips along with its key partner Broadcom (AVGO) are now front and center and gaining some clear momentum in the AI market and this is a great thing…just like AMD’s (AMD) recent success and we will see in the future with other Big Tech stalwarts getting in the AI chip Race and monetization around this 4th Industrial Revolution. That said, the AI Revolution starts and end with Nvidia today and that is not changing for another few years,” said analysts led by Daniel Ives.
The analysts noted that with the trillions set to be spent over the coming years, many big tech players will benefit besides Nvidia on the chip front. However, “that should not be mistaken for “Nvidia being the indisputable Rocky Balboa champion of the AI Revolution and that is not changing anytime soon on the chip front.”
The analysts added that it’s been a building crescendo moment for tech stocks that hit another turbulent moment when Nvidia last week put up strong growth numbers and blew away Street estimates, and the stock sold off the next day and continues to tread water with the latest GoogleTPU news adding to some pressure on the stock.
“This added to fears around the “AI Bubble” talk/chatter from the bears along with worries about Nvidia China revenues being restricted (although recent signs of progress from the Beltway) andfears of the “too big to fail” OpenAI chatter and circular financing…with the Burry short soap opera adding to the agita,” said Ives and his team.
However, the analysts noted that they view this as a short lived digestion moment for tech stocks as they believe tech stocks will have a rally into the rest of the year as investors look to play the “AI Revolution and the 2nd/3rd/4th derivatives now just starting to play out across consumer and enterprise names.”
“This is an AI Arms Race and what is fueling this next chapter of growth is Big Tech spending and that is NOT slowing down into 2026 with Nvidia’s bullish quarter/guidance/ commentary our major focal point as a huge piece in the AI puzzle into 2026,” said Ives and his team.