These 2 were the busiest U.S. apparel and beauty stores on Black Friday
Investing.com -- Alphabet may be positioned for a substantial revenue stream as supply chain checks point to a sharp rise in Tensor Processing Unit (TPU) production, according to Morgan Stanley.
Analyst Brian Nowak said the latest signals from Asia suggest that “TPU supply uncertainty may be less of a question,” potentially clearing the way for Google to sell more of its custom AI chips externally.
Morgan Stanley’s Asia semiconductor team now expects “~5mn/~7mn TPUs to be produced in ’27/’28, up from ~3mn/3.2mn previously.”
The upward revision, driven by supply chain signals picked up by analyst Charlie Chan, suggests Google is preparing for significantly greater TPU deployments.
The financial implications could be meaningful. Morgan Stanley reiterated that “every 500k of TPU chip sales could potentially add ~$13bn of revenue and $.40 to GOOGL EPS in ’27.”
The firm previously outlined how Google could sell TPUs directly into third-party data centres, noting that external sales could become an important complement to Google Cloud Platform (GCP) offerings.
While most of the increase in TPU purchasing is likely tied to Google’s own AI workloads and GCP demand, Nowak said the scale of expected production, “12mn TPUs over 2 years (vs 7.9mn over the previous 4 years),” highlights the potential for a broader commercial push.
Morgan Stanley believes these trends could be “tea leaves” of a budding TPU sales strategy as Google ramps up efforts to capitalise on industry-wide demand for advanced AI compute.
The updated supply outlook also contributed to Morgan Stanley’s decision to upgrade MediaTek to Overweight, citing stronger-than-expected AI ASIC demand feeding into the chip supply chain.