tech
Meta deal for millions of Nvidia chips is big
Money has been leaving Nvidia and going to other parts of the AI chip complex in recent months.
TL;DR
- Meta Platforms plans to spend billions on Nvidia chips, potentially revitalizing Nvidia's stock.
- Investor focus had recently shifted to memory and storage chips, with competition from Google's in-house AI chips also raising concerns.
- Nvidia's technology advantages and central role in AI buildout are re-emphasized by Meta's commitment.
- Shares of Nvidia saw a modest rise following the news, outperforming the S&P 500 on Wednesday.
- In 2026, Nvidia's stock performance had lagged behind other chip sectors like memory and storage (Sandisk, Western Digital, Micron) and even alternatives like AMD.
- Google's AI advancements with its custom Tensor Processing Units (TPUs) had also created competitive concerns for Nvidia.
- Meta's commitment includes not only GPUs but also standalone CPUs and networking technology from Nvidia.
- Meta's CEO Mark Zuckerberg understands the 'total cost of ownership' of Nvidia's technology, a perspective not always shared by traders.
- Jim Cramer's Charitable Trust holds long positions in Nvidia, Alphabet (Google), Broadcom, and Meta.