As AMD shares fell and Google's TPU ambitions stalled, Meta's commitment to Nvidia's full chip stack amounts to a strong vote of confidence that should (at least temporarily) settle investor nerves
For Nvidia Corp (NASDAQ:NVDA, XETRA:NVD), the timing could hardly be better.
After a rocky and roller coaster start to the year, the AI GPU maker received a welcome shot in the arm.
Meta has placed a multibillion-dollar chip order that covers nearly every layer of Nvidia's product lineup: Grace CPUs, Vera Rubin GPUs, and Spectrum-X networking hardware.
Analysts had reason to wonder. In November, Nvidia's stock fell 4% on reports that Meta was considering Google's tensor processing units for its 2027 data centre buildout.
AMD had been winning ground too, landing a notable deal with OpenAI in October as hyperscalers sought alternatives to an increasingly supply-constrained Nvidia.
Tuesday's announcement assuaged some fears that buyers were looking elsewhere. Meta isn't diversifying away from Nvidia. It's going deeper.
"This is about as close to a full endorsement as it gets in the AI arms race," said Matt Britzman, analyst at Hargreaves Lansdown.
He added: "For anyone questioning Nvidia's staying power at the top of the AI food chain, this deal is a pretty emphatic answer."
The decision to become the first company to deploy Grace CPUs as standalone processors is particularly telling. It signals that Meta's engineering teams believe in Nvidia's roadmap, not just its current hardware.
AMD shares fell 4% on the news, Nvidia was up roughly 0.8% after hours.