Google Makes Major New Move as Nvidia Faces New Challenge

Alphabet's Wing Aviation plans to invest $125M in a new drone factory in Fort Worth, Texas, creating up to 100 jobs. The facility will produce tens of thousands of drones annually, supporting expansion to 14 more U.S. markets and Japan by 2027. Wing partners with retailers like Walmart for deliveries, aiming to serve 40M Americans by 2027. The drones can reach 60 mph and carry packages via a tether system.

Google plans a $17B data center in Wyoming, partnering with energy firms. The project includes 702MW fuel-cell power and carbon capture, with Google funding 100% of its power and infrastructure needs. It will use air-cooling to reduce water use. Despite local and political opposition to data centers, Google aims to invest in community programs and tax contributions.

Meta, Google, and TikTok sued California over AB 1709, a law restricting addictive features for users under 16. The law, set to take effect in 2027, imposes penalties up to $50,000 per violation. The companies argue the law infringes on their editorial decisions and First Amendment rights, with each focusing on their own platforms. A court victory may not protect other companies from the law's provisions.

JPMorgan removed Alphabet from its Analyst Focus List, citing slower AI search monetization and heavy AI infrastructure spending, but maintained an Overweight rating. Alphabet's Q3 revenue rose 24.6% to $127.58 billion, but GAAP EPS missed estimates due to an $8.7 billion loss on equity securities. The stock is down 6.4% YTD but up 5.37% in the past week.

JPMorgan added Meta (META) and Amazon (AMZN) to its focus list, removing Alphabet (GOOG, GOOGL). META and AMZN each rose over 5% on Monday. JPMorgan cited Meta's advertising momentum and Amazon's cloud growth. Meta's Q3 ad revenue grew 26% YoY to $63.1B, while AWS revenue rose 39% YoY to $46B. Alphabet was demoted due to slower search growth and AI monetization concerns.

Google plans to launch two AI chips in 2025, targeting confidential computing and data-intensive applications. The chips, costing 30% less than Nvidia's GPUs, could pressure Nvidia's market share. Nvidia shares fell 5% amid a leadership investigation involving CEO Jensen Huang, who admitted an affair with a woman suspected of ties to Chinese intelligence. The board expressed confidence in Huang and initiated an independent inquiry.