Meta Stock Jumps as Google TPU Deal Follows Nvidia and AMD Chip Agreements

TLDR

• Meta has signed a multi-billion-dollar, multi-year deal with Google to rent its Tensor Processing Units (TPUs) for AI model development.
• Meta is also in talks to purchase Google TPUs for its own data centers as early as next year.
• This follows Meta’s separate multi-year chip deals with Nvidia and AMD this week.
• The Meta-Nvidia deal includes millions of Blackwell and Rubin GPUs, while the AMD deal is worth ~$100 billion over five years.
• Analysts rate META a Strong Buy, with an average price target of $864.62, implying ~31.6% upside.

Meta Platforms has had a busy week in the chip market. The company has now signed major chip supply deals with three of the biggest names in AI hardware: Nvidia, AMD, and now Google.

The latest deal sees Meta renting Google’s Tensor Processing Units, better known as TPUs, to help build new AI models. The Information first reported the agreement, describing it as a multi-year deal worth billions of dollars.

Meta is also in talks to go a step further and buy Google’s TPUs for use in its own data centers, potentially as soon as next year.

Meta Platforms, Inc., META

Google’s TPUs are developed by its parent company, Alphabet, and have been positioned as a direct competitor to Nvidia’s GPUs. TPU sales have become a growing part of Google’s cloud revenue, and this deal gives Alphabet a high-profile customer to point to.

Alphabet has also reportedly formed a joint venture with an unnamed large investment firm to lease TPUs to other customers — a sign the company is pushing harder to grow its chip business beyond its own internal use.

Meta’s Chip Spending Spree

Earlier this week, Meta announced a deal with AMD covering 6 gigawatts of computing power. That agreement is valued at around $100 billion over five years.

As part of that AMD deal, Meta will receive the first custom MI450 GPUs and Venice CPUs in late 2026. Meta also gets warrants for up to 160 million AMD shares, tying both companies’ interests together.

The Nvidia deal is just as large in scope. Meta plans to deploy millions of Nvidia’s Blackwell and Rubin GPUs, along with Grace and Vera CPUs, and Spectrum-X networking hardware. This marks Nvidia’s first major standalone Grace CPU rollout with any customer.

These three deals together paint a picture of a company spending heavily to close the gap with AI rivals.

Google’s TPU Push Against Nvidia

For Google, landing Meta as a TPU customer is a meaningful step in its effort to take on Nvidia’s dominance in the AI chip market.

Nvidia’s stock was down over 5% on the day, while AMD dropped more than 3%. Alphabet fell around 1.76%. Meta edged up 0.51%.

Earlier reports this week indicated Google has been exploring new ways to expand TPU adoption, with some startups already coming on board. However, the company has faced manufacturing bottlenecks and limited uptake from major cloud providers.

Meta’s business gives Google a chance to demonstrate its chips can handle demanding, large-scale AI workloads.

Alphabet formed a joint venture with an undisclosed investment firm to support TPU leasing — a structure that could help fund the manufacturing capacity needed to meet growing demand.

On the analyst side, META currently holds a Strong Buy consensus on TipRanks, based on 39 Buy ratings and 4 Holds. The average price target sits at $864.62, pointing to roughly 31.6% upside from current levels.

The post Meta Stock Jumps as Google TPU Deal Follows Nvidia and AMD Chip Agreements appeared first on CoinCentral.