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Investing.com -- Alphabet and Broadcom shares are rallying his week after a report from The Information said Meta Platforms is considering a major deal to rent and potentially purchase Google’s custom TPU chips starting in 2027.
The prospect of Meta shifting part of its AI compute roadmap toward Alphabet silicon sparked a sharp rotation across the AI complex, lifting names tied to Google’s hardware ecosystem while pressuring Nvidia and AMD.
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The move accelerated a winner-take-all narrative that has gained momentum since Nvidia’s latest results and Google’s well-received Gemini 3 launch.
According to Mizuho TMT specialist Jordan Klein, active managers are increasingly treating Google and its TPU platform as the perceived frontrunner in the AI race — and rotating capital accordingly.
“This winner-take-all trade in Ai and TMT has been underway over past few weeks,” Klein wrote, adding that the rally in Google and its core suppliers is “gaining more and more momentum.”
Klein said investors initially assumed the trade would fade once competitors rolled out new models and hardware, but the market has instead doubled down.
Market is acting like Google is winning the entire Ai race while Amazon, OpenAI, Microsoft, Nvidia and others all lose. This is because many fund managers feel they cannot afford to fight the trend this late in the year.
The reported Meta–Google discussions only added fuel, boosting Alphabet, Broadcom and other optical and silicon suppliers, while pressure increased on Nvidia, AMD, Oracle and several cloud giants.
Still, Klein warned that viewing AI leadership as settled in late 2025 is “myopic.” The AI race, he said, will produce rapid shifts in positioning as companies spend aggressively on compute, memory, networking and power infrastructure.
“This is a marathon that will see many different lead changes,” he wrote, pointing to how quickly sentiment flipped earlier this year when Google was widely viewed as lagging behind OpenAI.
Bank of America’s Vivek Arya also pushed back on the market’s sharp rotation, defending Nvidia and AMD. Arya reiterated Buy ratings on all these two, in addition to Broadcom, arguing that Nvidia’s valuation — roughly 25 times earnings despite expectations for more than 40% growth — prices the company like a “run of the mill franchise.”
Broadcom, he said, has an “upper-hand” with expected AI-related sales growth of more than 100% in 2026, though expanded Google TPU licensing could reduce some of its ASIC opportunities.
AMD, trading at about 33 times 2026 earnings, continues to benefit from multiple growth drivers spanning CPUs, GPUs, embedded and gaming.