Meta Signs Multi-Billion Dollar AI Chip Rental Agreement with Google
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 26 2026
0mins
Should l Buy META?
Meta Platforms (META) has inked an agreement to rent Google's (GOOGL) AI semiconductors, known as tensor processing units, to work on new AI models, The Information's Amir Efrati and Anissa Gardizy report, citing a person involved in the talks. The multi-year pact is worth billions of dollars, the authors note.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 579.230
Low
655.15
Averages
824.71
High
1117
Current: 579.230
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
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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See More
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- Capital Expenditure Plans: In 2026, Alphabet plans to invest $175 billion to $185 billion, while Amazon and Meta are set to spend $200 billion and $115 billion to $135 billion on AI-related investments, demonstrating their commitment to technological innovation.
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See More
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- Spotify Investment Opportunity: With Spotify's stock down almost 16% this year, Bank of America's $750 price target indicates a 53% upside, as analysts highlight multiple growth drivers in media and entertainment, making it an attractive investment choice.
- Citigroup Performance Expectations: Citigroup is also featured on Bank of America's list, with a $140 price target implying a 21% upside, as analysts believe the bank is well-positioned for strong performance ahead of its first-quarter earnings and investor day on May 7.
See More
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- Portfolio Concentration: As of December 31, 2025, Pershing Square's investments in Amazon, Alphabet, and Meta Platforms totaled $5.9 billion, representing nearly 40% of its portfolio, reflecting Ackman's strong confidence in these high-quality companies.
- Valuation Strategy: Ackman entered these positions during periods of weak market sentiment, initiating his investment in Alphabet in Q1 2023 at a forward P/E ratio of 16, followed by Amazon in April 2025 at 25, and Meta in Q4 2025 at 20, demonstrating his commitment to value investing.
- Capital Expenditure Plans: In 2026, Alphabet plans to spend $175 billion to $185 billion, while Amazon and Meta are set to invest $200 billion and $115 billion to $135 billion respectively; Ackman believes these investments will drive future earnings growth despite ongoing concerns about returns.
- AI Progress and Market Demand: Ackman praised the AI advancements of these companies, noting that Alphabet's AI Overviews has over 2 billion users, Amazon's cloud services thrive on strong AI demand, and Meta leverages AI to enhance user engagement and advertising effectiveness, showcasing their leadership in technological innovation.
See More
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- AI Strategy Shift: Apple has struck a multi-year deal with Google to utilize Gemini AI for a revamped Siri, which could impact user data privacy as Apple pays around $20 billion annually to maintain Google's default search engine status, necessitating careful management to avoid negative implications for its core business.
- Mixed Market Response: Apple's slow progress in AI updates has raised consumer skepticism, despite plans to launch Apple Intelligence in 2024 with features like image generation and text rewriting, potentially affecting its competitive edge in the market.
- Capital Expenditure Control: Unlike rivals such as Amazon and Microsoft, which are committing hundreds of billions annually to AI infrastructure, Apple has kept its capital expenditures in check, a strategy that reduces short-term risks but places it at a disadvantage in generative AI.
- Privacy and Technology Balance: CEO Tim Cook has emphasized that privacy is a
See More
Apple's Transformation Challenges in the AI Era
- Privacy vs. AI Dilemma: Apple has long championed privacy as a core principle, contrasting sharply with competitors that rely on advertising, but this strategy has placed it at a disadvantage during the initial wave of generative AI, potentially impacting its future competitiveness.
- Partnership with Google: Apple has struck a multi-year deal to utilize Google's Gemini AI technology for a revamped Siri, with Apple reportedly paying around $20 billion annually to Google as the default search engine, raising concerns about user data privacy in this new arrangement.
- Delayed AI Updates: The long-awaited AI update for Siri has faced delays, with Apple promising a launch by year-end, yet mixed consumer responses indicate a lack of competitive edge in the AI space, which could affect the long-term relevance of its products.
- Future of AI Hardware: As AI shifts towards edge computing, Apple is integrating AI-capable chips into its devices, aiming to process user queries locally, which could resolve privacy issues and reshape its market position in the AI era.
See More
