Alphabet’s AI Chips Are a Potential $900 Billion ‘Secret Sauce’

Alphabet Inc. investors are growing increasingly confident that the company’s semiconductors could represent a significant driver of future revenue for Google’s parent.

The success of Alphabet’s tensor processing unit, or TPU, chips is a primary reason for the stock’s 31% fourth-quarter rally, which is the tenth best performance in the S&P 500 Index. The TPUs were always seen as a major strength internally, accelerating growth for the company’s cloud-computing business. But there’s rising optimism that Alphabet could start selling the chips to third parties, creating a new revenue stream that could ultimately be worth almost a trillion dollars. ...