NVIDIA Breaks Records By Losing $278 Billion In Market Cap Today, And A New Subpoena By The DOJ Only Adds To Investors’ Woes

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Throughout today's regular trading session, investors continuously tried to determine the primary cause behind the relentless weakness in NVIDIA shares, one that saw the stock plunge by ~10 percent, erasing $278 billion in market capitalization and constituting a new record for any public company.

Some pointed to today's release of ISM manufacturing survey, which saw inventories climbing by most since the pandemic-driven disruption. Others pointed to lingering concerns over the company's peaking margins as it ramps up production of the Blackwell chips while still pushing the previous-gen Hopper series of chips through its sales channels.

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As a refresher, while announcing its latest quarterly earnings, NVIDIA guided to a gross profit margin of 74.4 percent for the ongoing quarter, which was below not only the June-ending quarter's actual margin of 76.7 percent but also below that quarter's guidance of 74.8 percent.

Yet, the primary reason hit the airwaves just moments ago when Bloomberg disclosed that the US Department of Justice (DOJ) has formally subpoenaed NVIDIA over its ongoing antitrust probe against the company. A select clique of investors apparently knew of this development and was likely responsible for much of today's aberrant price action. If true, this should merit a dedicated investigation by the SEC.

Today's development comes after the DOJ and the FTC reportedly agreed on a formula back in August to divide the antitrust investigation workload vis-a-vis NVIDIA, Microsoft, and OpenAI between them, with the DOJ concentrating on NVIDIA alone while the FTC taking the lead on a broad-based antitrust probe against Microsoft and OpenAI.

Of course, the DOJ is likely to focus on NVIDIA's attempts to become a one-stop shop for all things AI,