Shares of Alphabet gained while most chip stocks fell after Nvidia announced that Jensen Huang is resigning. Alphabet has been expanding its own chip lineup to take market share from Nvidia, and investors appear to be betting that effort pays off.
Alphabet finished the session up 1.8% today, even as the Nasdaq Composite slipped 0.4%. The gain came on a day when Nvidia announced the resignation of Jensen Huang.
Huang's exit opens a gap for Alphabet's chips
The consequences of Huang's departure are not fully clear. He was seen as the face of the AI boom and had made Nvidia the dominant AI chip company.
That could leave an opening for Alphabet, which has built out its own chips business in recent years. Earlier this week, the company launched the TPU 8tx and 8i Max, specialized versions of its tensor processing units that improve on the 8t and 8i chips introduced this spring.
The 8tx is optimized for secure and confidential inference. The 8i Max is designed to overcome the memory wall, which means using memory efficiently as compute scales.
Chip stocks fall, with a few exceptions
With the news out on Nvidia, investors seem to be hedging that Alphabet's chips have a greater chance of gaining market share. Chip stocks were mostly down, since the chipmaker underpins much of the AI boom.
Alphabet was one of a handful of winners. Broadcom, Alphabet's design partner for TPUs, rose 5.5% on the day.
Whether Huang's exit disrupts Nvidia's execution remains unknown.
Source: Motley Fool
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