The story of the day: Alphabet, $GOOGL, is now up another +4% and Nvidia, $NVDA, is down -4% on concerns over...

The story of the day:

Alphabet, $GOOGL, is now up another +4% and Nvidia, $NVDA, is down -4% on concerns over increased competition.

This comes after reports that Meta is considering using Google’s AI chips over Nvidia’s.

So, is this really that bad for Nvidia?

The reality is that AI compute demand is rising 50–70% YoY and is WELL above levels Nvidia can keep up with.

Nvidia still controls as much as 90% of the global AI chip market.

Of course, increased competition is a material development, but Nvidia is still the arms dealer of AI.

And the fact that AI chip demand is spreading beyond Nvidia only reinforces how far we are from an “AI bubble.”

AI demand is exploding faster than supply.