“Nvidia Stock Plummets Over 9% as DOJ Sends Subpoenas – What’s Next for NVDA?”
Nvidia Stock Extends Losses as Market Declines and Antitrust Investigation Escalates
Nvidia stock (NVDA) took a hit early on Wednesday, dropping more than 9% to close at $108 as the overall market declined on the first trading day of September. The chipmaker’s shares fell an additional 3% in premarket trading after the Department of Justice sent subpoenas to Nvidia and other companies as part of an investigation into potential antitrust violations.
This latest development comes on the heels of Nvidia being the worst performer among the “Magnificent Seven” stocks on Tuesday, hitting its lowest level since August 12. Stacy Rasgon, a senior analyst at Bernstein, noted that Nvidia’s decline was part of a broader trend affecting technology stocks, with the XLK sector leading the market declines, followed by Energy (XLE) and Industrials (XLI).
Just last week, Nvidia reported quarterly results that beat consensus estimates but failed to boost the stock price. The company’s gross margins were a point of concern for investors, leading to a cautious outlook. However, Rasgon remains optimistic about Nvidia’s future, especially with the upcoming production ramp-up of its next-generation Blackwell chip in the fourth quarter.
Despite the recent setbacks, Wall Street analysts have maintained a bullish outlook on Nvidia, with Stifel reiterating a Buy rating and a $165 price target. The analysts believe that Nvidia is well-positioned to benefit from the ongoing modernization of data center compute, making it a primary beneficiary in the industry.
Prior to the recent market downturn, Nvidia had been leading a rebound in stocks, gaining nearly 25% in just three weeks following a global sell-off. While Tuesday’s losses were significant, Nvidia’s stock is still up more than 115% year-to-date, showcasing its resilience in a volatile market environment.
Looking ahead, investors will be closely monitoring Nvidia’s product launches and market performance in the coming quarters. If the company can successfully execute its product roadmap and meet market demand, there is potential for the stock to rebound and continue its upward trajectory.
In conclusion, Nvidia’s stock may be facing challenges in the short term, but its long-term prospects remain promising. With a strong market position and ongoing innovation in the AI chip space, Nvidia is poised to weather the current market turbulence and emerge stronger in the future.