The evolution of this investigation could have a significant impact on Nvidia’s dominant position in the artificial intelligence market. As the case progresses, the market response will reflect investor confidence in the company’s ability to overcome this legal challenge.
Despite the day’s drop, Nvidia shares have more than doubled so far this year.
Nvidia is expecting further falls in its shares on Wednesday, driven by the progress of an antitrust investigation in the United States. On Tuesday, its shares plummeted by almost 10%, a drop that had no clear justification until, after the market closed, Bloomberg revealed that the Department of Justice (DoJ) had sent subpoenas to Nvidia and other companies, seeking evidence of possible antitrust violations by the chipmaker.
Before the market opens, Shares of the microchip maker fell 1.5%after having fallen by almost 10% at the close on Tuesday. With trading already underway, the stocks continue to decline and are down 3.3%.
The move marks an escalation of the DoJ’s investigation into Nvidia, which is currently the dominant leader in supplying artificial intelligence (AI) processors.
The investigation examines whether the Wall Street giant is hampering competition by making it harder for other suppliers to enter the market and penalizing customers who do not use its chips exclusively, taking advantage of its leadership in the AI sector.
In response to these accusations, Nvidia defended its position, stating that its market leadership is due to the superiority of its products, which offer superior performance compared to those of the competition.
Nvidia: the background of the research
Bloomberg, citing people familiar with the investigation, reported Tuesday afternoon that the government “sent subpoenas to Nvidia Corp. and other companies as it seeks evidence that the chipmaker violated antitrust laws, an escalation in its probe into the dominant supplier of AI processors.”
nvidia
Reuters
Despite the day’s drop, Nvidia shares have more than doubled so far this year. Last week, the company reported its latest quarterly financial results, which showed that the AI giant continues to see strong growth, even as some investors question the sustainability of that growth.
“Nvidia wins on merit, as reflected in our benchmark results and the value to customers, who can choose the solution that best suits them,” an Nvidia spokesperson said via email in response to Bloomberg’s report. The Justice Department declined to comment. The company is scheduled to participate in an investor event on Sept. 11.
Source: Ambito
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