Google Deal With Meta Is Bad News for Nvidia, Rate Cut Probability Rises

Author: The Arora Report | November 25, 2025 12:45pm

To gain an edge, this is what you need to know today.

Bad News For Nvidia

Please click here for an enlarged chart of NVIDIA Corp (NASDAQ:NVDA).

Note the following:

• The Morning Capsule is about the big picture, not an individual stock.  The chart of NVDA stock is being used to illustrate the point.
• In yesterday's Morning Capsule, we wrote:
• “On several benchmarks, the new version of Alphabet Inc Class C (NASDAQ:GOOG) Gemini is beating the latest version of OpenAI’s ChatGPT. This has two implications.
  • Google might be able to keep its search dominance.
  • This is a problem for Nvidia (NVDA) because Google is using its own chips.  ChatGPT is using Nvidia’s chips.  If the cost of compute for everyone using Nvidia chips is higher than the cost of compute for Google, it is ultimately negative for Nvidia as either those using Nvidia chips will lose market share or Nvidia will have to lower its profit margins.”

• The chart shows that yesterday after breaking below the low band of zone 1, NVDA rallied to the top band of zone 1 as investors shrugged off the news.
• After the market close, the news came that Alphabet Inc Class A (NASDAQ:GOOGL) has struck a multi-billion dollar deal with Meta (META) to supply AI chips.  The chart shows that NVDA stock has fallen below zone 1.
• In our analysis, Google's AI chip is cheaper and uses less power than Nvidia chips but lacks the power and flexibility of Nvidia's chips.  In certain applications, Google's AI chip will be more competitive but in most applications, Nvidia chips will still be dominant.  However, entry of Google into the chip space is bad news for Nvidia, Advanced Micro Devices Inc (NASDAQ:AMD), and Intel Corp (NASDAQ:INTC).  This is good news for Broadcom Corp (NASDAQ:AVGO) because Broadcom is Google's chip partner.  This is also bad news for data center companies that have already purchased large amounts of Nvidia chips, such as Oracle Corp (NYSE:ORCL), CoreWeave Inc (NASDAQ:CRWV), IREN Ltd (NASDAQ:IREN), and Nebius Group NV (NASDAQ:NBIS).
• Producer Price Index (PPI) came mixed.  Here are the details:
  • Headline PPI came at 0.3% vs. 0.3% consensus.
  • Core PPI came at 0.1% vs. 0.2% consensus.
• Prudent investors closely watch retail sales data as the U.S. economy is 70% consumer based.  Retail sales came mixed.  Here is the latest retail sales data.
  • Headline retail sales came at 0.2% vs. 0.4% consensus.
  • Retail sales ex-auto came at 0.3% vs. 0.3% consensus.
• ADP data shows that the private sector lost an average of 13,500 per week over the four weeks ending Nov. 8.
• San Francisco Fed President Mary Daly has thrown her support behind a rate cut.
• In our analysis, the probability of a rate cut in December is now better than 65%.  
• Adding to the sentiment on the positive side are two pieces of news:
  • President Trump will visit China.
  • Ukraine has agreed to core terms of a peace deal.

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in Alphabet (GOOG) and Meta Platforms Inc (NASDAQ:META).

In the early trade, money flows are negative in Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Microsoft (MSFT), Nvidia (NVDA), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are mixed in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Oil

Oil is falling on the news that Ukraine has agreed to core terms of a peace deal.

Bitcoin

Bitcoin (CRYPTO: BTC) is range bound.

What To Do Now

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.

You can determine your protection bands by adding cash to hedges.  The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.

A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.  A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.  When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.  High beta stocks are the ones that move more than the market.

Traditional 60/40 Portfolio

Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.

Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.  Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.

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The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

Posted In: $BTC AAPL AMD AMZN AVGO CRWV GOOG GOOGL INTC IREN META NBIS NVDA ORCL QQQ SPY TSLA USO