Nvidia shares dropped as reports surfaced that Meta Platforms may use Alphabet’s AI chips for data centers from 2027. Nvidia’s data center business is still growing rapidly, but competition could pressure margins. Meta considering alternative chips is concerning to Nvidia investors, as it relies heavily on data center chip sales for revenue.

Before the Meta-Alphabet news, Nvidia’s revenue for Q3 2026 was $57 billion, up 62% YoY. Data center revenue reached $51.2 billion, up 66% YoY. Management remained confident in sales of Blackwell GPUs, but Meta’s potential chip deal poses a threat to Nvidia’s dominance in the AI chip market.

Meta Platforms potentially choosing Alphabet’s TPUs over Nvidia’s GPUs starting in 2027 led to sharp declines in Nvidia shares. This news highlights concerns about pricing and margins for Nvidia’s chips if competition increases. Nvidia’s stock is still priced for continued dominance, but Meta’s talks with Alphabet may impact future growth prospects for Nvidia.

Read more at Nasdaq: Nvidia Stock Slides on Alphabet Competition Fears: Is This a Buy-the-Dip Moment?