Nvidia was edging down early on Friday. The chip maker's stock is still struggling as some of its biggest customers put more resources into in-house artificial-intelligence processors.
Nvidia shares were down 0.3% at $202.14 in premarket trading. The move was broadly in line with the wider market, with futures tied to the Nasdaq 100 dropping 0.2%.
The latest challenge is that social-media company Meta Platforms plans to start manufacturing a new in-house AI chip from September, according to a Reuters report Thursday. Meta declined to comment to Barron's.
Meta has already released several generations of its in-house MTIA chips and said they could replace graphics-processing units -- Nvidia's specialty -- in some servers and be expanded to power AI training. So far, custom chips have generally been used mainly for inference, the process of generating answers or results from the models, rather than training.
However, Meta's custom chips are unlikely to entirely displace Nvidia, with the processors being designed to "augment" purchases from Nvidia and Advanced Micro Devices, Reuters reported.
"Although Nvidia will likely lose relative market share within Meta's increasing build plans, the hyperscalers overall spending will still more than double, which will likely result in continued significant spending growth to Nvidia processors on an absolute dollar basis," wrote Benchmark Research analyst Cody Acree in a research note.
A bigger issue for Nvidia is that Google and Amazon.com are preparing to sell their chips to external customers. Google's Tensor Processing Units and Amazon's Trainium processors can run the latest models, while also potentially delivering more cost-efficient performance in certain setups.
Meta might still get a boost from increased AI spending by the Big Tech companies in the coming earnings season, but keep an eye on what its customers say about their own chip plans.
Write to Adam Clark at adam.clark@barrons.com
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July 10, 2026 08:30 ET (12:30 GMT)
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