Alphabet Expands TPU Market to Compete with Nvidia
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: NASDAQ.COM
- Market Expansion Strategy: Alphabet plans to allow select customers to deploy TPUs directly in their data centers, aiming to expand its market share by meeting the demands of AI labs and capital markets firms, particularly in the context of competing with Nvidia.
- Strong Financial Performance: Alphabet reported a 22% year-over-year revenue increase to $109.8 billion in Q1, with operating income soaring 39% to $39.6 billion, indicating that strong demand for TPUs and AI models is driving profitability in its cloud computing segment.
- Future Growth Potential: Analyst Gil Luria estimates that TPUs could capture 20% of the AI accelerator market over time, which would make Alphabet's custom chip business worth $900 billion, although Nvidia is expected to remain the market leader.
- Investor Considerations: Despite Alphabet's current share price of $386, Wall Street's target price of $430 implies an 11% upside, and analysts generally view the stock as slightly undervalued, with expected annual growth of 16% over the next three years.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to fall
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 390.130
Low
305.00
Averages
374.25
High
400.00
Current: 390.130
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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