NVDA Underperformance Amid Alphabet Competition & Broader Market Rally Analysis
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On 2025-11-26, SeekingAlpha published an article highlighting Nvidia (NVDA) underperformance in the previous session (2025-11-25) due to new competition from Alphabet, while the broader market rallied. Key observations from the event included:
- Russell 2000 leading gains (aligning with internal data showing +2.00% on 25th [0])
- Major indices breaking above key moving averages
- Alphabet’s expansion of custom Tensor Processing Units (TPUs) as a direct threat to Nvidia’s GPU dominance [1][2][3]
Supporting data confirms Alphabet’s seventh-generation Ironwood TPUs are now available externally, with talks underway for Meta Platforms rentals/purchases and Anthropic’s commitment to 1 million TPUs [1][3].
- Nvidia Relative Underperformance:NVDA closed up +1.66% on 25th Nov (to $177.82) but underperformed the Russell 2000’s +2.00% gain [0]. However, it outperformed the Tech sector (+0.78%) and NASDAQ (+0.98%) [0], indicating resilience amid competition.
- Broader Market Sentiment:All major indices closed positive, with Russell 2000 leading (signaling broad-based risk-on sentiment) [0].
- Competition Risk:Alphabet’s TPUs threaten up to 10% of NVDA’s annual revenue due to superior performance-per-dollar for cost-sensitive AI inference workloads [3].
- Ecosystem Strength:Analysts (e.g., Wedbush) argue Nvidia retains an edge via its CUDA ecosystem and flexible GPUs, mitigating near-term disruption [7].
| Metric | Value | Source |
|---|---|---|
| NVDA Close Price (25th Nov) | $177.82 | [0] |
| NVDA Daily Gain (25th Nov) | +1.66% | [0] |
| Russell 2000 Gain (25th Nov) | +2.00% | [0] |
| Tech Sector Gain (25th Nov) | +0.78% | [0] |
| Alphabet TPU Client Commitment | Anthropic (1M TPUs) | [1][3] |
- Directly Impacted:
- NVDA (competition risk from Alphabet TPUs)
- Alphabet (GOOGL: potential revenue growth from TPU sales)
- Related Sectors:
- Technology (NVDA’s sector: +0.78% on 25th Nov)
- Communication Services (Alphabet’s sector: -0.15% on 25th Nov [0])
- Upstream/Downstream:
- Meta Platforms (potential TPU customer)
- Data center operators (choice between NVDA GPUs and Alphabet TPUs)
- Exact revenue impact of Alphabet’s TPUs on NVDA
- Meta’s final decision on TPU adoption timeline
- Long-term margin trends for NVDA amid competition
- Bullish:Nvidia’s CUDA ecosystem and frequent chip launches (every 1-2 years) provide a moat [2].
- Bearish:Michael Burry’s bearish put options on NVDA signal concerns about AI bubble risks and chip obsolescence [8].
- Meta’s TPU deal outcome
- Anthropic’s TPU deployment progress
- NVDA’s next chip launch (to counter TPUs)
- Margin trends in upcoming earnings
- Competition Risk:Users should be aware that Alphabet’s Ironwood TPUs may reduce NVDA’s pricing power and market share, potentially impacting up to 10% of its annual revenue [3].
- Investor Skepticism:Michael Burry’s bearish position on NVDA (via put options) highlights growing concerns about AI bubble risks and chip obsolescence [8].
- Margin Pressure:TPUs’ superior performance-per-dollar could lead to margin compression for NVDA if clients shift to cost-sensitive workloads [3].
[0] Ginlix Analytical Database (Tools: get_stock_daily_prices, get_market_indices, get_sector_performance, get_ticker_news_tool)
[1] Chronicle Journal: “The AI Compute Showdown: Nvidia’s Reign Challenged …” (http://markets.chroniclejournal.com/chroniclejournal/article/marketminute-2025-11-25-the-ai-compute-showdown-nvidias-reign-challenged-by-alphabets-vertical-integration-and-gemini-power)
[2] Fool.com: “Nvidia Sinks After Threat From Alphabet Emerges …” (https://www.fool.com/investing/2025/11/25/nvidia-sinks-after-threat-from-alphabet-emerges-is/)
[3] SeekingAlpha: “Google Vs. Nvidia: Trillions Of Dollars At Play” (https://seekingalpha.com/article/4847645-google-vs-nvidia-trillions-of-dollars-at-play)
[4] Yahoo Finance: “Alphabet AI Chips, Gemini Model Position It to Rival Nvidia” (https://finance.yahoo.com/news/alphabet-rally-threatens-world-most-104028610.html)
[5] Business Insider: “Nvidia, AMD Stocks Fall As AI Chip War With Google Heats up” (https://www.businessinsider.com/nvidia-stock-price-nvda-alphabet-google-ai-chips-tpu-gpu-2025-11)
[7] SeekingAlpha News: “Google’s AI Chips ‘Great Thing’ But Will Not Shake Nvidia: Wedbush” (https://seekingalpha.com/news/4526185-googles-ai-chips-great-thing-but-will-not-shake-nvidia-wedbush)
[8] Business Insider: “‘Big Short’ Investor Michael Burry Says Nvidia’s Memo Was ‘Disappointing’ …” (https://www.businessinsider.com/big-short-michael-burry-substack-nvidia-memo-depreciation-ai-bubble-2025-11)
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