Shares of NVIDIA Corporation (NASDAQ:NVDA) are falling Tuesday following reports that Meta Platforms, Inc (NASDAQ:META) is considering using chips designed by Google.
What To Know: Meta is in talks to spend billions on tensor processing units (TPUs) from Alphabet Inc’s (NASDAQ:GOOG) Google, according to a report from The Information. If purchased, the chips would be used in Meta’s data centers starting in 2027. The report also indicates that Meta could rent chips from Google Cloud as soon as next year.
Chips are a key part of the infrastructure behind artificial intelligence, and Nvidia is the market leader in the space. The company brought in $57 billion in revenue last quarter, and has beat market expectations for revenue every quarter for the past two years, according to Benzinga Pro.
Nvidia shares are tumbling as investors fear competition in the space could become even more crowded. The potential move from Meta is being viewed as a significant threat to Nvidia’s current dominance in the AI chip market.
Nvidia’s lead in the AI chip market is due to its origins as a maker of graphics processing units, which were previously used primarily for video games to load visuals quicker. GPUs have high computational power, which is helpful for training AI models.
NVDA Analysis: Nvidia stock is trading within its 52-week range of $86.62 to $212.18, reflecting a significant pullback from its recent highs. Despite this decline, Nvidia has shown a robust year-to-date performance, up 24.4%, indicating strong underlying demand for its products and services.
Currently, Nvidia is trading approximately 7.8% below its 50-day moving average of $186.55, which may suggest a short-term bearish sentiment. The stock is also trading approximately 12.4% above its 200-day moving average of $152.98, highlighting a longer-term bullish trend. The relative strength index (RSI) stands at 45.17, signaling a neutral position that does not indicate immediate overbought or oversold conditions.
NVDA Price Action: Shares of Nvidia were trading down 5.45% at $172.61 at the time of publication on Tuesday, according to Benzinga Pro.
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