Good morning, investors. It’s not every day you see two of the biggest stocks in the world diverging like Alphabet and Nvidia did on Tuesday.

The market seems to be positioning for not only a new winner in the AI race, but a surprise entrant to the chip-making monopoly that Nvidia had built for itself.

The market is acting like Google is coming for Nvidia.

Alphabet’s vertical integration with its new Gemini 3 AI model and its custom AI chips have fueled enthusiasm for its standing in the AI race while spooking Nvidia shareholders, creating a widening performance gap between the two stocks. 

Specifically, worries seem to be rising that the customers who have long relied on Nvidia chips could soon turn to Google.

Indeed, The Information reported this week that Meta is in talks to use Google’s Tensor Processing Units (TPUs).

That, in theory, redirects billions in business from Meta out of Nvidia’s pocket and into Google’s. 

The report alone was enough to wipe out hundreds of billion in Nvidia’s market cap Tuesday while boosting Alphabet’s, shrinking the valuation gap between the two heavyweights to its narrowest since April.

To be clear, Nvidia’s graphics processing units (GPUs) remain the gold standard for the AI industry.

But Google’s TPUs — which power its highly praised Gemini 3 — are cheaper to develop and require less power. 

Some industry experts estimate that TPUs offer up to four times better performance per dollar than comparable GPUs. 

So while the technology itself may not be apples-to-apples competitive, the economics of choosing one over the other does seem to be a hit against Nvidia, in the market’s view.

Nvidia, for its part, seemed to brush off the news entirely.

“We’re delighted by Google’s success,” Nvidia’s communications team wrote in a statement.

“They’ve made great advances in AI and we continue to supply to Google. Nvidia is a generation ahead of the industry — it’s the only platform that runs every AI model and does it everywhere computing is done.”

Shares of Alphabet have more than doubled the returns of Nvidia so far this year, though only in recent weeks have technologists seemed to concede that Google could win the AI race.

Its outperformance is underscored by its unique “full stack” advantage:

That’s left companies like Oracle, which has spent billions of Nvidia chips, lagging the market as it reprices to a landscape that includes Google’s more economical alternatives.

While both companies are sure to compete for years to come, these developments confirm that the AI chip battle is no longer a monopoly.

That said, it’d be disingenuous to pit Google and Nvidia against one another long-term and predict a winner and loser.

If the AI revolution pans out the way bulls expect, both behemoths will fare just fine.

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📊Alphabet’s rally is shaking up tech leadership. Rave reviews for Google’s latest Gemini model is fueling the company’s market cap into the $4 trillion club. It’s now up more than 37% since the middle of October, adding about $1 trillion in that stretch. (Bloomberg)

📉US consumer confidence fell to its lowest since April. Respondents soured on the state of the economy and prospects for the future, according to the Conference Board’s latest results. The index fell 6.8 points to 88.7. (CNBC)

📈 US retail sales rose less than expected in September. In the first glimpse of consumer spending in two months, headline retail sales climbed 0.2%, below estimates for a 0.4% month-over-month increase. (Yahoo Finance)

Tech analyst Dan Ives joined me on Full Signal to discuss why he believes the AI revolution is just starting, how he decides what stocks to buy, his warning to bears heading into 2026, and his views on Palantir, Microsoft, Google and more.

Tune in on YouTube, Spotify or Apple Podcasts.

🗓 November 26, 1957: US stocks sold off after news broke that President Eisenhower had suffered a stroke, building on broader macro anxieties that had dragged the Dow lower double-digits during that year.

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

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