The semiconductor industry witnessed a major shakeup this week as reports emerged that Google is planning to sell billions of dollars worth of its in-house tensor processing units (TPUs) directly to Meta. This potential deal, which would place Google in direct competition with Nvidia and AMD, sent shockwaves across the market, lifting shares of Meta, Broadcom, and Intel, while putting pressure on Nvidia.
According to industry insiders, Meta is looking to secure a massive supply of advanced AI chips amid soaring demand for GPU compute power. The company already purchases large volumes of Nvidia GPUs and an increasing number of AMD units, but both suppliers are struggling to meet global demand. Nvidia’s high pricing, combined with its 75 percent gross margins, adds additional pressure for large-scale AI players like Meta to diversify their hardware stack.
Google’s TPUs, used internally for nearly a decade, appear to be aligning perfectly with Meta’s workload needs. Both companies rely on recommendation algorithms at the core of their operations, making Google's TPU architecture a natural fit for Meta’s feed-ranking, content recommendation, and ad-targeting systems. Unlike Google Cloud access, where TPUs are leased, this deal would enable Meta to house these chips in its own data centers—an entirely new direction for Google’s TPU commercialization.
This shift also marks a significant opportunity for semiconductor firms deeply embedded in Google's TPU manufacturing process, including Broadcom and Taiwan Semiconductor Manufacturing Company. Broadcom plays a central role in Google's custom ASIC pipeline and is expected to benefit heavily from the expansion of TPU production. Analysts also expect Lam Research, Micron, and other ecosystem partners to see boosted demand from this increased specialization.
One of the biggest winners of the week was Intel. Rumors intensified that Apple will become a major customer for Intel’s advanced packaging division. Apple, which is expanding its manufacturing footprint in India and producing large volumes of iPhones in the region, is reportedly negotiating with Intel to move some complex packaging workloads to the company’s U.S.-based facilities. Intel shares rallied more than 20 percent this week amid speculation that Apple could become a cornerstone customer for Intel’s foundry business.
Intel’s advanced packaging capabilities provide a major advantage, particularly as components produced in the United States often need to be shipped overseas for final packaging. Intel aims to bring more of this process back domestically, using packaging as an entry point to eventually fabricate full chips for customers like Apple.
Amazon also posted gains this week as it expanded its infrastructure footprint to more than 900 global facilities. The company’s in-house AI silicon efforts, including its latest Tranium chips, faced obstacles due to delays from its current semiconductor partner Marvell. With Amazon losing precious time while Nvidia and AMD release updated chips annually, the company is reportedly turning to Broadcom to fix and accelerate the troubled Tranium 3 project.
Broadcom’s role in the custom ASIC business continues to grow at a rapid pace. The company is also believed to be working with Intel on advanced packaging for Amazon’s next-generation chips, giving both semiconductor giants strong tailwinds heading into 2025.
Netflix experienced both momentum and challenges this week as it surged toward the release of the final season of Stranger Things. The platform experienced outages due to overwhelming traffic, signaling high demand but also exposing pressure on Netflix’s cloud infrastructure.
Nvidia started the week in the $177 range and saw volatility due to concerns about Google potentially competing directly in the AI chip space. However, analysts suggest the market is misunderstanding the situation. Nvidia’s primary customer base, which includes sovereign nations, enterprise clients, and non-mega-cap companies, will continue relying on merchant silicon rather than custom ASICs.
Custom ASICs, including Google’s TPUs or Meta’s potential future in-house chips, are expected to remain viable primarily for trillion-dollar companies or heavily funded AI labs like OpenAI, Anthropic, and xAI. Nvidia continues to lead the merchant GPU market and may gain additional upside if the Trump administration relaxes chip restrictions to China, allowing sales of H200 chips. Analysts predict that Chinese companies may secretly circumvent government stance by accessing chips through foreign cloud platforms.
Google emerged as one of the top-performing stocks of the week, crossing $320 and approaching a $4 trillion market cap. If the company manages to sell half a million TPUs, analysts estimate Google’s earnings per share could increase by as much as 3 percent. Google has spent over a decade optimizing its TPU software stack, and its collaboration with Broadcom and Taiwan Semiconductor suggests it aims to scale its TPU commercialization far beyond internal use.
Salesforce CEO Marc Benioff publicly praised Google’s Gemini model, highlighting the intensifying competition among leading AI models from Google, Anthropic, xAI, and OpenAI. While Gemini and Grok show impressive performance in facts and creativity respectively, Anthropic’s Claude is gaining reputation for behaving like a polished high-level employee.
Meanwhile, OpenAI faces escalating challenges, including a funding requirement of nearly $27 billion by 2030. Despite its groundbreaking innovations, the company is in a capital-intensive race, relying on large cloud partners and expanding data center construction to maintain its lead.
Tesla posted a modest 5 percent gain as the company continues pushing its in-car AI chips and preparing to scale its autonomous taxi fleet. Tesla’s latest hardware 4 units show marked improvements in self-driving capability, including driveway navigation. The company expects to double its robotaxi fleet in Austin, although only a few dozen vehicles are currently active.
Tesla’s chip roadmap now operates on an annual cadence similar to Nvidia and AMD, enabling rapid iteration. This positions Tesla strongly for a future in autonomous mobility alongside competitors like Waymo and Amazon-backed Zoox.
On the macro front, the S&P 500 flashed warning signs after breaking its multi-month trend line. Technical indicators show lower highs and lower lows forming, indicating a possible micro downtrend. A deeper correction could retest the 200-day moving average before stabilizing, though the long-term uptrend remains intact.
Meta delivered one of the biggest technical rebounds of the week, surging nearly 8 percent from $600 to approach $650. The stock bounced precisely off major trend support, and charts suggest Meta could target $700–$750 in the coming months if momentum continues into its earnings season. Meta’s next earnings report is 68 days away, and investors are cautious about shorting ahead of a strong advertising cycle.
Technical charts for Apple, Amazon, and Microsoft also show strong support and recovery signals. Apple faces a $38 billion fine from India over App Store policies, but analysts believe strong ties with India’s growing manufacturing sector will likely reduce the penalty over time.
Tesla entered a consolidation phase as shares stabilized above major long-term support. The market will evaluate Tesla’s upcoming earnings in approximately two months as macro conditions stabilize, and a new Federal Reserve chair selected by President Trump could influence rate expectations.
The week brought a mix of surprises, technical breakouts, and significant semiconductor partnerships highlighting the growing importance of custom AI chips. With heavyweights Google, Amazon, Microsoft, Meta, Apple, and Tesla now aggressively competing in AI hardware, the semiconductor landscape is poised for massive transformation from 2025 onward.
As investors digest these developments, the core message remains: those following semiconductor supply chains and cloud partnerships closely had early access to these trends. For the broader market, these insights only became clear as stock movements accelerated through the week.
Disclaimer
This article is for informational and educational purposes only. It is not financial advice, investment advice, or a recommendation to buy or sell any security. Stock markets involve risk, and readers should conduct their own research or consult a licensed financial advisor before making investment decisions. The information presented here is based on publicly available data, market analysis, and reported industry developments, and may change over time.
