Nvidia Stock Is Struggling in 2026, and This Magnificent Seven Stock Can Make Things Worse for the Artificial Intelligence (AI) Giant. Should Investors Hit the Sell Button?
2026-07-20 12:30
•Harsh Chauhan •The Motley Fool
••••• ••••• Axe Capital view
Meta’s AI Chip Push: A Threat to Nvidia or Just Noise?
Meta’s move into custom AI chips poses a challenge to Nvidia, but the GPU leader’s grip on inference workloads stays strong.
Nvidia’s AI dominance faces a fresh test as Meta ramps up its custom chip efforts, seeking to cut reliance on Nvidia’s GPUs. Yet, Nvidia still controls a commanding 74% of the AI inference market, with hyperscalers doubling down on their Nvidia orders. This isn’t a clear-cut takeover but a strategic dance. Meta is hedging, expanding Nvidia deals even while building its own chips, which suggests Nvidia’s tech remains unmatched in scale and efficiency. For South African investors, this story matters through the USD/ZAR lens. If Nvidia stumbles, tech sentiment offshore could sour, pulling the rand weaker because of reduced dollar inflows into growth stocks. Locally, Naspers and Prosus, heavily exposed to global tech, would likely feel the ripple. I’d watch Nvidia’s next earnings carefully; if growth snaps back, it signals resilience. But if Meta chips bite significantly, the AI gold rush could cool down. this is just my opinion and not financial advice
I would hold Naspers and Prosus for now but be ready to trim if Nvidia’s share losses accelerate, pressuring global tech momentum and the rand. For direct Africa exposure, USD/ZAR is worth monitoring as a market barometer.
- NVDA
- Naspers
- Prosus
- USD/ZAR
- Meta’s custom chips rapidly erode Nvidia’s market share
- A sharp USD/ZAR depreciation triggered by global tech weakness
6/10
Meta Platforms is accelerating in-house AI chip development starting September, which could reduce its reliance on Nvidia GPUs. However, despite competition from custom chips, Nvidia's AI inference market share increased to 74% in Q1, and hyperscalers continue to rely on its cutting-edge processors. Analysts remain bullish on Nvidia's earnings growth, with potential 70% upside if it trades at S&P 500 average multiples.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Harsh Chauhan
Categories: Equities, Earnings, Technology, AI, Semiconductors
Tickers: NVDA, META, TSM, AVGO, AMD
Sentiment: Positive - Despite near-term underperformance and competitive pressures from custom chips, Nvidia's AI inference market share increased to 74% in Q1, and hyperscalers continue major GPU deployments. Analysts project 70% upside potential with strong earnings growth expected. Meta's in-house chip development reduces Nvidia GPU dependency, but the company continues to expand its Nvidia agreement for large-scale GPU and CPU deployments, indicating a balanced approach rather than complete replacement.
Keywords: AI chips, custom processors, GPU market, inference workloads, semiconductor competition, data center infrastructure
Insights:
- NVDA: Positive: Despite near-term underperformance and competitive pressures from custom chips, Nvidia's AI inference market share increased to 74% in Q1, and hyperscalers continue major GPU deployments. Analysts project 70% upside potential with strong earnings growth expected.
- META: Neutral: Meta's in-house chip development reduces Nvidia GPU dependency, but the company continues to expand its Nvidia agreement for large-scale GPU and CPU deployments, indicating a balanced approach rather than complete replacement.
- TSM: Positive: TSMC is selected as the manufacturing partner for Meta's custom AI chips, positioning it to benefit from the growing demand for in-house chip production among hyperscalers.