Remember when Google was just that search engine your parents used to find recipes? Well, plot twist: they’re now coming for Nvidia’s lunch money in the AI chip game, and honestly, it’s about time someone did.
Here’s the tea: Alphabet (Google’s parent company) just scored a massive deal with Meta to supply their custom Tensor Processing Units (TPUs) instead of Nvidia’s crazy-expensive GPUs. And the market? It’s absolutely here for it. Google’s stock jumped over 13% in a week, which in stock market terms is basically doing a victory lap.
Why This Actually Matters (Beyond the Stock Price Fireworks)
For years, Nvidia has been the cool kid everyone wanted to sit with at the AI lunch table. Their GPUs were the gold standard, but here’s the thing – they’re also ridiculously expensive. It’s like buying a Ferrari when you just need to get to the grocery store.
Enter Google’s TPUs, which are basically saying “Hey, we can do this AI thing just as well, but without making your CFO cry.” According to Google’s own numbers (and yes, take that with a grain of salt), their TPUs deliver 2.8 times better performance per watt than the competition. For Meta, which spent billions on AI infrastructure last year, this could slash costs by 30-40%. That’s not pocket change – that’s “buy a small country” money.
The Plot Thickens
This isn’t just about saving money, though. Google’s playing 4D chess here. Their AI features are already boosting their search business (AI Overviews increased user engagement by 25%), and YouTube’s algorithm is basically eating TikTok’s lunch. It’s like they’re winning at three different games simultaneously while everyone else is still figuring out the rules.
Wall Street analysts are practically doing cartwheels. Wedbush’s Dan Ives called it perfectly: “GOOG isn’t just playing catch-up; it’s rewriting the rules.” Bank of America slapped a $335 price target on the stock, and multiple firms upgraded their ratings faster than you can say “artificial intelligence.”
But Wait, There’s More Drama
Of course, it’s not all sunshine and rainbows. Amazon and Microsoft are also building their own chips (Trainium and Maia, respectively), so this is turning into a proper tech brawl. It’s like watching the Avengers, but instead of saving the world, they’re fighting over who gets to power the AI revolution.
The bottom line? Google just proved they’re not content being the search engine that knows everything – they want to be the company that powers everything too. With AI spending expected to hit $200 billion annually, this TPU move with Meta could be the catalyst that cements Google’s spot in the multi-trillion-dollar club.
At a forward P/E of 29, Google’s stock still looks reasonably priced for a company that’s basically becoming the Swiss Army knife of tech. Sometimes the best investments are hiding in plain sight, wearing a familiar logo.