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Key Takeaways
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Nvidia shares lost ground Wednesday, extended Tuesday’s losses following reports the U.S. Department of Justice (DOJ) sent subpoenas to the chipmaker as part of an antitrust investigation.
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The decline in Nvidia’s stock price also comes after the chipmaker’s sales forecast may have fallen short of investors’ lofty expectations, despite beating analysts’ estimates.
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The recent downturn in Nvidia stock could intensify investor scrutiny of other AI stocks, with investors likely to be watching Broadcom’s earnings Thursday for signs of strong AI demand.
Nvidia (NVDA) shares lost ground Wednesday, extended Tuesday’s losses following reports U.S. regulators sent subpoenas to the maker of artificial intelligence (AI) chips as part of an antitrust investigation.
The chipmaker’s stock was down about 1% after the opening bell Wednesday, after tumbling 9.5% Tuesday. The stock has had a rough start to September, amid concerns Nvidia’s sales forecast may have fallen short of investors’ lofty expectations, despite exceeding analysts’ estimates.
Nvidia’s Dominance in Market for AI Chips Under Regulator Scrutiny
The U.S. Department of Justice (DOJ) reportedly sent subpoenas to Nvidia, examining whether the company’s actions warrant a formal antitrust investigation. A potential antitrust case would likely focus on Nvidia’s dominance in the market for AI chips.
An Nvidia spokesperson told Investopedia that the chipmaker “wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.” The DOJ declined to comment.
What Nvidia’s Losses Could Mean for AI Stocks
The recent fall in Nvidia’s stock price comes after the chipmaker released fiscal second-quarter results that exceeded analysts’ estimates, but may have fallen short of investors’ lofty expectations for growth.
The downturn in AI darling Nvidia’s stock price could intensify scrutiny of other AI stocks ahead of Broadcom’s (AVGO) earnings, due after the bell Thursday, with investors likely to be watching closely for signs of strong AI demand.
Analysts have remained bullish on Nvidia stock, citing high demand for the new Blackwell system. Despite recent losses, Nvidia shares have more than doubled since the start of the year on surging demand for its AI chips.
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