Microsoft Now Has 3 Generations of Its Own AI Chips. Nvidia Is Still the Chip Stock to Buy.

Microsoft has announced Maia 300, its third-generation in-house AI chip, and plans to ramp up Maia from 2027 as the primary inference system for its own products. Microsoft estimates Maia 300 will generate 40% more tokens per megawatt than top GPU-based systems, though this is its own projection, and it still plans to deploy Nvidia's next-generation Vera Rubin systems. Nvidia's fiscal Q2 2027 revenue reached $96.2 billion, up 106% year over year, while spending by hyperscale customers more than doubled to $48.7 billion. The author argues that custom chips like Maia may take some work from Nvidia, but the stock, about 6% below its October 6 record close, does not appear priced as if Nvidia will keep all of it. It trades at roughly 14 times the average analyst earnings estimate for fiscal 2028, compared with about 23 times for Microsoft's fiscal 2028.

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