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Key Points
Meta is reportedly considering purchasing Tensor Processing Units (TPUs) from Alphabet for its AI data centers, a shift that may adversely affect Advanced Micro Devices (AMD) and Nvidia. Following the news, AMD’s stock dropped 7.9% as of 11:10 a.m. ET.
Financial Context
This potential move signifies a likely loss for Nvidia, which has been a major hardware supplier for Meta, while AMD may also see negative impacts since it was previously a candidate for Meta’s GPU needs. AMD currently holds a market cap of $350 billion, with trailing profits of only $3.3 billion, indicating a price-to-earnings ratio over 100, raising concerns about its valuation amidst these changes.
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