MediaTek Shares Post Best Week Since 2002 on Google AI Partnership

MediaTek Inc. is heading for its strongest weekly performance in over two decades, fueled by growing investor optimism around the Taiwanese chipmaker's collaboration with Google on artificial intelligence technology.

The stock rose for a fifth consecutive session in Taipei on Friday, bringing its weekly gain to more than 20%. The rally comes as Google's latest Gemini AI model and its tensor processing unit (TPU) deals with major tech firms reshape MediaTek's growth prospects. The company has reportedly partnered with Google on the design of TPUs, which are increasingly viewed as potential competitors to Nvidia's dominant AI chips.

While MediaTek—best known for smartphone processors—has faced pressure from weak end-demand and competitive margins, the AI collaboration has injected new momentum into its shares, which remain down about 2% for the year.

"China business remains tough into next year, yet Google TPU upside should offset the smartphone headwind in the longer term," said Morgan Stanley analysts Charlie Chan and Daniel Yen, who upgraded the stock to overweight on Thursday.

The AI landscape is evolving rapidly. While the initial phase focused on training large language models using powerful GPUs like those from Nvidia, the industry is now shifting toward inference—how AI models respond to user queries—which benefits specialized chips like Google's TPUs.

UBS analysts, led by Sunny Lin, have significantly raised their forecasts for MediaTek's TPU revenue, now estimating $4 billion in sales from the chips by 2027, up from a prior projection of $1.8 billion. They expect TPUs to contribute about 20% of MediaTek's operating profit by 2028, "depending on execution by MediaTek and Google."

This week's surge was also driven by reports that Meta Platforms is in talks to use Google TPUs in its data centers by 2027. UBS sees additional growth potential for MediaTek through future ASIC projects with Meta and other tech giants.

Wall Street remains broadly bullish on MediaTek, with 23 analysts recommending buy, 10 suggesting hold, and none advising sell. The consensus price target implies another 9% upside over the next year.

In a recent note, Macquarie analysts including Arthur Lai said they "lean more" toward MediaTek and other Google partners over companies in the Nvidia supply chain, describing the current AI expansion as "a necessary, capital-intensive build-out of a new, foundational technology layer" rather than a speculative bubble.