Nvidia Stock Slips as Big Tech Rivals Expand AI Chip Push

Shares of NVIDIA have fallen behind the broader semiconductor market as investors increasingly focus on growing competition in the artificial intelligence chip industry.

Despite continued strong demand for AI infrastructure, Nvidia stock has struggled in recent weeks while rival technology companies aggressively expand their own chip businesses.

Nvidia falls even as AI spending surges

Nvidia shares have dropped roughly 7% since reaching a record high in late April, making the company one of the weakest performers in the Philadelphia Semiconductor Index during that period.

The decline comes despite another strong earnings season for AI-related companies and continued increases in corporate spending on data centers and artificial intelligence infrastructure.

Investors appear increasingly concerned that Nvidia’s dominant position in AI processors could face long-term pressure from competitors and even from its own customers.

Alphabet and Amazon expand custom AI chip efforts

Alphabet Inc. has become one of the biggest emerging challengers to Nvidia through its tensor processing units, or TPUs.

Reports this week said AI company Anthropic plans to spend approximately $200 billion with Google over the next five years on AI infrastructure.

Alphabet also recently announced plans to offer its TPU chips directly to select external customers for use in their own data centers.

Meanwhile, Amazon continues expanding its Trainium AI chip business, which reportedly has more than $225 billion in revenue commitments.

Meta is also developing its own in-house AI processors.

AMD gains momentum in AI race

Advanced Micro Devices (AMD) surged after forecasting major growth tied to demand for processors used in artificial intelligence services.

AMD shares jumped sharply after executives projected stronger adoption of both CPUs and AI-related computing products.

Other companies including Intel and Qualcomm are also attempting to increase their presence in the AI data center market.

Nvidia still dominates market share

Despite rising competition, Nvidia remains the dominant player in AI accelerators.

According to Bloomberg Intelligence data, Nvidia controlled approximately 86% of the AI accelerator market in 2025, unchanged from the previous year.

Analysts say there is still little evidence that Nvidia is losing major customers or meaningful market share today.

However, investors are increasingly questioning whether the company can maintain the same level of dominance long term as hyperscale tech companies diversify their AI hardware strategies.

Alphabet closing in on Nvidia’s market value

Nvidia became the world’s most valuable company during the AI boom, reaching a market value near $4.8 trillion.

But Alphabet Inc. has rapidly closed the gap thanks to growing enthusiasm around its AI products, cloud computing business, and proprietary chips.

Alphabet’s market value recently climbed to roughly $4.7 trillion.

Analysts say Google’s TPU business could become a major revenue source in coming years, especially as cloud customers seek alternatives to Nvidia’s expensive GPUs.

Wall Street remains bullish on Nvidia

Even with the recent stock decline, most Wall Street analysts remain optimistic about Nvidia’s future.

The company is still expected to post roughly 70% revenue growth during its current fiscal year, far outpacing most major technology companies.

Analysts also continue raising long-term revenue and earnings estimates ahead of Nvidia’s next earnings report later this month.

Still, some investors believe Nvidia is no longer viewed as the uncontested AI winner it once appeared to be.

“Nvidia used to be the sure thing in AI,” one portfolio manager told Bloomberg. “Now investors are starting to question its competitive moat.”

AI infrastructure spending remains massive

Large technology companies including Alphabet, Amazon, Meta, and Microsoft are expected to spend hundreds of billions of dollars this year on AI infrastructure and data center expansion.

Those four companies alone account for nearly half of Nvidia’s revenue, according to Bloomberg supply chain estimates.

Analysts say demand for AI computing remains strong enough that multiple chipmakers may continue growing simultaneously, even as competition intensifies.