AMD jumps about 13% on Google's secure TPU deal, a contract neither company priced
Google built TPUs to avoid buying Nvidia accelerators, moved them onto its own CPUs in April, then bought AMD's processors back for the one layer it left out: confidential computing. AMD jumped about 13% on a deal neither company priced, while Nvidia slid on a separate probe of its CEO.
Vincent Jiangthree-minute read
A TPU built for secrets, hosted by AMD
Google designs its tensor processing units, the AI chips it built to avoid buying Nvidia's−4.91% — Nvidia, down 4.91 percent today by the rack. Its newest system still needed someone else's processor. The TPU 8tx, one of two additions to Google's eighth-generation TPU line announced Monday, reuses the training-grade 8t silicon but is paired with fifth-generation AMD+1.79% — AMD, up 1.79 percent today EPYC server processors, which keep data and model weights isolated even while a model is actively using them 12. It is the first cloud TPU with hardware-based confidential computing, built for banks, governments and other regulated buyers 31.
A 13% day for a deal with no price tag
AMD rose about 13% and Alphabet+0.21% — Alphabet, up 0.21 percent today added 3.16% to $293.77 45. Oppenheimer upgraded AMD to Outperform with a $600 target the same morning, a call the firm tied to last week's results rather than to Google 4. Neither company disclosed the agreement's value, expected volumes, pricing or regions 65, and Google says the systems become available in 2027 7.
Nvidia fell 4.27% to close at $178.67 on its own trouble: an independent board investigation, opened Sunday, into reports that chief executive Jensen Huang was targeted by a foreign intelligence operation 89. Huang apologized to staff for an affair, and the board said it had no reason to believe national security or Nvidia secrets were compromised 89.
The deal day: AMD up about 13%, Nvidia down 4.3%, Alphabet up 3.2%
Data
| One-day move | |
|---|---|
| AMD | 13% |
| Alphabet | 3.16% |
| Nvidia | -4.27% |
April's Axion switch, partly reversed
Google introduced the flagship 8t and 8i at its Cloud Next conference in April, running on its in-house Axion CPUs in place of the x86 processors of earlier generations 17. The 8tx puts x86 back in the box 63. AMD says more than 10 hyperscalers and AI labs already run EPYC hosts beside Nvidia GPUs, AMD Instinct accelerators and custom silicon, so it collects whichever accelerator wins 63. Why Axion did not get this slot, neither company says.
The December guide carries the valuation
AMD's third-quarter revenue was $13.4 billion, up 45% year on year, with data center at $8.5 billion, up 97%, about 64% of the total 4. Guidance for the December quarter is about $17 billion, plus or minus 3%, at roughly 55% non-GAAP gross margin 4.
Bloomberg Intelligence estimates Google's TPU-related sales could grow from $12 billion this year to more than $135 billion by 2028, but most new TPU systems run Axion hosts, so most of that growth is not AMD's 7. GuruFocus's valuation model already put Monday's price about 56% above its estimate of fair value 4.
AMD's December guide of about $17B would be its biggest quarter by far
The guide implies about 27% sequential growth, before a single TPU 8tx ships
- Quarterly revenue
- Estimate
Data
| Quarterly revenue | |
|---|---|
| Q4 '24 | $7.66B |
| Q1 '25 | $7.44B |
| Q2 '25 | $7.69B |
| Q3 '25 | $9.25B |
| Q4 '25 | $10.27B |
| Q1 '26 | $10.25B |
| Q2 '26 | $11.54B |
| Q3 '26 | $13.38B |
| Q4 '26 guide (estimate) | $17B ($16.49–17.51B) |
Two bars: a $17 billion quarter, then 2027 customer names
The rally has to clear two bars: roughly $17 billion of December-quarter revenue with data center above 60% of sales 4, and 8tx availability dates and named customers in 2027, the first read on whether regulated buyers pay for confidential computing 57. Google designed the chip, the network and the rack, then bought the lock from AMD 1.
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