Advanced Micro Devices, Inc. (NASDAQ:AMD) shares are tumbling Tuesday. A report indicated that Meta Platforms, Inc (NASDAQ:META) may use Google’s AI chips in its data centers.
- AMD shares are sliding on disappointing news. Follow the breaking news here.
What To Know: Alphabet Inc. (NASDAQ:GOOG)'s Google is in talks with Meta and other cloud customers about a potential deal that would allow Meta to use Google's AI chips in data centers, according to The Information.
The report states that Google is accelerating efforts to compete more directly with NVIDIA Corp. (NASDAQ:NVDA) in the AI chip market, highlighting its tensor processing units, or TPUs, which are designed to optimize performance and cost across AI training and inference.
Google’s TPUs are available for rent on Google Cloud. The report indicates that Meta could rent chips from Google Cloud as soon as next year, and is considering spending billions on Google AI chips in 2027 and beyond.
Nvidia shares tumbled on the news, dragging down others in the chip space. AMD is actually getting hit the hardest as investors fear competition in the space could become even more fierce. A potential shift from Meta toward Google's in-house AI chips could signal increased competition in the broader AI accelerator market.
AMD shares have been on a tear in recent months after the company projected a 35% compound annual revenue growth rate over the next three to five years at a financial analyst day. The strong growth is expected to be driven by the company’s AI data center business.
AMD Analysis: AMD is trading approximately 9.3% below its 50-day moving average of $215.58, which may suggest a bearish short-term sentiment. In contrast, the stock is trading approximately 31.3% above its 200-day moving average of $148.98, highlighting a longer-term bullish trend that remains intact despite the recent volatility.
With the Relative Strength Index (RSI) at 43.21, the stock is in neutral territory, indicating that it is neither overbought nor oversold at this juncture. This positioning could suggest potential for a rebound if buying interest returns, especially as the stock approaches its 50-day moving average, which may act as a primary support level in the absence of calculated support.
AMD Price Action: At the time of writing, AMD shares are trading 9.11% lower at $195.47 according to data from Benzinga Pro.
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