Concerns over cartel investigation put pressure on Nvidia stock price

Investor expectations forcing share price crash at chip maker

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Jensen Huang, Nvidia

The chip giant Nvidia is getting wind of the stock market this week. Investors are pushing the sell button after the company received subpoenas from the US Department of Justice.

Nvidia’s share price fell about 10% during the first day of trading this week. That’s bad news for CEO Jensen Huang (pictured), among others.

He saw his assets reduced by some $10 billion to $94.9 billion due to the share price drop. Despite that sharp drop, he remains the 18th richest person in the world.

Compared to the start of this year, Huang’s wealth has increased by some $51 billion.

Nvidia is currently in turbulent waters. In five days, some 15% of the company’s stock market value has gone up in smoke.

First, there were the quarterly results. These were certainly not bad, but they did not please investors.

Revenue was up 122% in the second quarter to more than $30 billion. Net profit was up 152%.

The fact is that Nvidia faces “unsustainably high expectations” from investors, according to analysts at Bloomberg Intelligence. As a result, the company is facing a backlash that is as unjustified as it is cruel.

Added to this is the US Department of Justice’s investigation into a possible monopoly of the company. Among other things, it is investigating whether Nvidia is using antitrust practices to maintain its leadership.

However, the company is still supreme in the chip sector, and competitors are finding it difficult to offer products with similar power on a large scale.

The beginning of the end for Nvidia’s success story? Not very likely. The fairy tale will continue for a while, if only until competitors manage to fire up the chip giant. Nvidia’s boss should see his fortunes grow again once investors come to their senses and have more realistic expectations.

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