Alphabet (NASDAQ: GOOGL) stock could gain over the next 12 months as the company expands its artificial intelligence (AI) chip business, challenging Nvidia’s (NASDAQ: NVDA) dominance.
On November 9, Google introduced two additional configurations of its eighth-generation Tensor Processing Units (TPUs), TPU 8tx and TPU 8i Max, targeting secure computing and advanced AI workloads.
The TPU 8tx targets governments and regulated industries requiring confidential computing, while the TPU 8i Max combines two chips in one package to handle demanding workloads involving large amounts of information. Both systems are expected to become available in 2027.
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Notably, Google’s expanding chip business could become a significant revenue driver. Bloomberg Intelligence estimates that TPU-related sales will rise from $12 billion in 2026 to more than $135 billion by 2028.
The chips reportedly cost around 30% less than Nvidia’s GPUs while delivering competitive performance for certain workloads.
Google chips clientele
At the same time, Google is also attracting major customers, including Apple (NASDAQ: AAPL), Meta Platforms (NASDAQ: META), Oracle (NYSE: ORCL) and Anthropic, while OpenAI is reportedly planning to purchase its chips.
By offering competitive performance at lower costs, Google could capture a larger share of AI training and inference workloads, reducing dependence on Nvidia’s GPUs.
OpenAI’s reported purchasing plans and Anthropic’s existing use of TPUs alongside Nvidia hardware highlight this growing competition.
Although Nvidia retains advantages through its CUDA ecosystem and broader hardware compatibility, Google’s expanding customer base could gradually erode its market share and pricing power.
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Google stock price prediction
Finbold sought insights from OpenAI’s ChatGPT, which projects that Alphabet shares could reach $380 by November 9, 2027, representing 33.4% upside from the reference price of $284.78.
The forecast reflects Google’s potential to commercialize its in-house chips, expand Google Cloud and establish another major growth driver beyond advertising.
ChatGPT also outlined three scenarios for the stock over the next year. Its base-case target is $380, while the bullish scenario projects $450, representing 58% upside. The bearish scenario puts GOOGL at $250, implying a 12.2% decline.
The bullish outlook assumes stronger TPU adoption, higher AI infrastructure revenue, and improved investor confidence.
Conversely, rising infrastructure spending, weaker advertising growth and intensifying competition could weigh on earnings and valuation.
Wall Street bullish on Google stock
Meanwhile, Wall Street analysts tracked by TipRanks maintain a ‘Strong Buy’ rating on Alphabet, with an average 12-month price target of $398.30.
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Of the 34 analysts covering the stock, 30 recommend buying and four assign ‘Hold’ ratings, with none recommending selling.
The average target implies 39.86% upside, while the highest and lowest targets stand at $490 and $300, respectively.
Ultimately, Google’s ability to turn growing TPU demand into sustainable revenue and profits will be crucial to its stock performance.
Featured image via Shutterstock
