By Emily Bary
Meta reportedly is considering using Alphabet’s custom chips for its data centers. Nvidia and AMD shares fall on the prospect of more formidable semiconductor competition.
Google designs in-house chips in partnership with Broadcom.
Meta Platforms investors may not know how to feel about the Facebook parent company’s stepped-up artificial-intelligence investments lately, but Alphabet investors seem to be liking the sound of them.
Shares of Alphabet (GOOG) (GOOGL) rose 2.7% in after-hours trading Monday, toward fresh highs, after The Information reported that Meta (META) was considering outfitting its data centers with perhaps billions of dollars’ worth of custom chips from Google.
The prospect of this development positions Alphabet as a more foreboding rival to Nvidia (NVDA) and Advanced Micro Devices (AMD) in the red-hot market for AI infrastructure.
Representatives from Meta and Google didn’t immediately respond to a MarketWatch request for comment.
For Google, the report is the latest signal of broad-based AI momentum. The company said it trained its new Gemini 3 model on tensor processing units, its custom chips, and there seems to be growing outside interest in Google’s semiconductor work.
See more: Google may be Nvidia’s biggest rival in chips – and now it’s upping its game
Alphabet shares have surged 68% so far in 2025, with most of that coming in the past few months, reflecting optimism about Google’s TPU business as well as its Gemini AI model. The latest version has won praise in the technology world, reinforcing a view that Google is positioned to be an AI winner, perhaps at the expense of OpenAI.
Shares of Alphabet’s suppliers continued to rise in conjunction with Google’s momentum. Broadcom shares (AVGO) advanced 1.7% in Monday’s extended trading, as the company partners with Alphabet on the TPUs. Celestica (CLS) and Lumentum Holdings (LITE), two optical suppliers whose stocks saw outsize increases in Monday’s regular session, added to their gains in the aftermarket.
Don’t miss: Broadcom and these AI stocks are surging as plays on Alphabet’s rapid rise
Meta shares ended fractionally higher in Monday’s extended session. The company’s talk of heightened AI spending spooked Wall Street in the wake of the company’s last earnings report in late October, with investors still unsure about whether the company will be able to monetize all its AI investments. Meta said that AI has helped it improve advertising products and recommendation engines, but the company has struggled to match rivals in terms of momentum for its AI chatbot.
Meanwhile, an emerging narrative in the AI trade is that what’s good for Google and its universe of suppliers isn’t necessarily good for AI players generally. Google’s TPUs are a type of application-specific integrated circuit, and the debate over ASICs versus graphics processing units, like those made by Nvidia and AMD, is nothing new. But Google’s apparent internal and external momentum for its TPUs suggests budding competition for Nvidia, by far the most dominant seller of AI hardware to a broad list of customers, and AMD, which already has a relationship with Meta and has been trying to win more GPU business.
See more: Google is crushing it. Why that’s worrying investors in Nvidia and other AI stocks.
Shares of Nvidia and AMD each lost more than 1% in Monday’s after-hours trading.
-Emily Bary
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11-24-25 2223ET
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