Nvidia Stock Drops. Reported Meta Deal Shows Google Threat Isn’t Going Away.

Nvidia CEO Jensen Huang. (Ezra Acayan/Getty Images)

Nvidia stock was dropping on Tuesday, as investors kept worrying that the chip maker could lose its position as the king of artificial intelligence to Google.

Shares fell 6.6%, erasing $294 billion in market cap. That put the stock on pace for the fourth largest one-day valuation wipeout ever by a U.S. company, according to Dow Jones Market Data.

Google parent Alphabet climbed 2.9%, putting it on course to hit another record high. The S&P 500 was flat, and the advanced 0.5%.

The moves came after a report said that Facebook owner Meta Platforms is in talks to buy artificial-intelligence chips from Google. Meta is in discussions to use Google’s tensor processing units, or TPUs, in its data centers from 2027, according to The Information, which cited a person familiar with the matter.

“Google Cloud is experiencing accelerating demand for both our custom TPUs and NVIDIA GPUs; we are committed to supporting both, as we have for years,” a Google spokesperson told Barron’s.

Meta didn’t immediately respond to a request for comment.

Created with Highcharts 9.0.1Source: FactSet

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The report is the latest worry for Nvidia shareholders, who have been fretting that Google could upend the AI trade.

The company’s latest Gemini 3 large-language model, which is getting rave reviews, was trained primarily on its own TPUs.

The chips aren’t as flexible as Nvidia’s graphics processing units—but they are both cheaper to develop and use less power to run at full capacity, so their rise in prominence is a big worry for Nvidia investors.

Shares in rival GPU maker Advanced Micro Devices tumbled 8.4%. Shares in Broadcom, which helps design Google’s TPUs, were 0.3% lower.

The debate about GPUs and TPUs could carry on for a while, but that may lead to a buying opportunity for investors, Bernstein analyst Stacy A. Rasgon wrote in a research note.

“We continue to advocate owning both Nvidia and Broadcom in our coverage,” said Rasgon, who rates both chip stocks at Outperform. “Broadcom has the narrative at the moment, but Nvidia valuation is looking increasingly attractive and the sell-offs seem overdone to us.”

“We would be buyers,” he added.

Write to George Glover at george.glover@dowjones.com