Meta Platforms is reportedly in talks to spend billions of dollars on Google-designed chips, which could have costly consequences for Nvidia.
If the deal materializes, some analysts believe Nvidia could lose up to $180 billion in market value over the next year. The deal could completely reshape the chip market landscape, threatening Nvidia’s dominance of the space with increased competition and diversification of suppliers.
Broadcom Inc. (AVGO) would strongly benefit from this deal, since they’re a primary partner in the design and manufacture of Google’s custom Application-Specific Integrated Circuits (ASICs) (known as Tensor Processing Units (TPUs)).
Charlie Moon covered this topic when he guest hosted yesterday’s episode of MarketMinds—where he addressed two burning questions created by this scenario:
Does AVGO technically pose a $180 billion threat to Nvidia?
Could this be the beginning of the end for Nvidia?
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Charlie reviewed a number of details on this topic, including:
- How AVGO stands to benefit most from a potential Meta/Google chip deal
- AVGO’s potential impact if Nvidia loses $180 billion over the next year
- NVDA stock’s reaction to yesterday’s news
- Key price level he believes is important for Nvidia
- The potential role Charlie believes the broader markets could have played in Nvidia’s recent dip
- Why Charlie doesn’t believe this is the beginning of the end for Nvidia
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