On September 3rd local time, the US stock market opened lower and fell, with the three major indexes collectively closing lower, all hitting their largest daily declines since August 6th. In this storm, the stock price of giant NVIDIA suffered a heavy blow, plummeting 9.53%, and its market value evaporated by $278.9 billion (approximately RMB 1986.1 billion) in a single day.
This decline has also attracted widespread attention in the market. In fact, after Nvidia released its "explosive" second quarter performance, its stock price has been continuously declining due to various factors behind it.
Firstly, from today's news perspective, anti-monopoly investigations may become a key trigger. According to media reports, Nvidia, as a tech giant in the AI field, recently received a subpoena from the US Department of Justice. The focus of the investigation by the Department of Justice is whether Nvidia is using its dominant position in the field of artificial intelligence chips to hinder competition from other companies.
According to reports, sources have revealed that investigators from the US Department of Justice are investigating Nvidia's sales practices, particularly whether the company is maintaining its market dominance by requiring customers to purchase additional products or promising not to buy chips from competitors. The investigation by the Ministry of Justice has clearly intensified the market's uncertainty about Nvidia's future development, triggering a large-scale sell-off.
At present, Nvidia is leading the way in the field of AI chips, especially in the AI computing chip arena, occupying over 90% of the market share. Previously, there have been multiple reports of the US Department of Justice conducting an antitrust investigation into it, but Nvidia has not yet commented on this.
Secondly, the decline in Nvidia's stock price was also influenced by the overall US stock market. On that day, the US stock market opened lower and fell, and the three major indexes collectively closed lower. The direct factor is the poor performance of the latest economic data released by the United States in August, which has brought tremendous pressure to the market.
On the morning of September 3rd, two sets of manufacturing indicators released by the United States showed that US factories were still in a slowdown mode in August, exacerbating concerns about the direction of the economy. The manufacturing PMI of the Institute for Supply Management (ISM) in the United States recorded 47.2, while the S&P global figure was 47.9, both of which are below the 50 boom bust line, indicating a contraction in economic activity in this sector.
This signal of economic slowdown has also caused concern in the market, leading to a collective decline in large technology stocks. Besides Nvidia, other tech giants, including semiconductor companies, have also performed poorly. Among them, Synaptics and Monolithic Power Systems, both components of the Philadelphia Semiconductor Index, fell more than 10%. TSMC, which has a larger market value, fell 6.53%, Broadcom fell 6.16%, ASML fell 6.47%, and AMD fell 7.82%.
The stock prices of large technology companies have also experienced varying degrees of decline, with Apple falling 2.72%, Microsoft falling 1.85%, Google C falling 3.94%, Amazon falling 1.26%, Meta Platforms falling 1.83%, and Tesla falling 1.64%.
Many market analysts have pointed out that the sharp decline in chip stocks today is following the trend of the US stock market's heavy decline. Investors' concerns about the slowdown of the US economy have once again escalated, triggering a stock market sell-off.
In addition, Nvidia has been continuously declining since the release of its financial report after last Wednesday, and it is also facing growth pressure. Despite consecutive quarters of triple digit growth and exceeding expectations in revenue and profit, Nvidia remains unsatisfactory to the outside world. Compared to the previous quarter, the doubling of growth in the second quarter has slowed down. But as the strongest technology stock on the surface, this is a pressure that Nvidia has to bear.
Nvidia's stock price has doubled in the past year, and market expectations for it have been too high. However, the latest financial report shows that it is becoming increasingly difficult for the company to meet market expectations, which has led to controversy among investors about the sustainability of its stock price. Concerns about multiple factors such as overvalued AI and the sustainability of the AI chip investment frenzy have dragged down chip and AI stocks.
Despite recent stock price declines raising doubts about Nvidia's short-term prospects, some market analysts remain optimistic about the company's long-term development. Tesla CEO Elon Musk recently stated that despite Nvidia's current challenges, the market demand for its products remains strong. For example, Musk's artificial intelligence startup xAI has successfully launched the Colossus AI training infrastructure powered by 100000 Nvidia H100 GPUs in just 122 days, and plans to further expand its scale in the coming months.
The demand for AI chips has not decreased. According to data provided by TrendForce Consulting to 21st Century Business Herald reporters, due to the increasing demand for Nvidia's core product Hopper GPU, Nvidia's data center business has driven the company's overall revenue to more than double in the second quarter of fiscal year 2025, reaching $30 billion. The supply chain survey results show that CSP (cloud service provider) and OEM (original equipment manufacturer) customers will increase their demand for H200 in the near future, and it is expected that this GPU will become NVIDIA's main supplier after the third quarter of 2024.
This positive outlook may bring some comfort to Nvidia. However, the impact of antitrust investigations on Nvidia's future business remains to be observed. If the Ministry of Justice ultimately determines that Nvidia has violated antitrust laws, this could have a profound impact on its market position and business strategy.
Analysts believe that Nvidia's stock price may continue to be under pressure in the short term, but in the long run, the company's technological advantages and market dominance will still provide support. Next, the outside world will continue to closely monitor how Nvidia responds to this series of challenges and how these challenges will affect the AI market landscape.