Nvidia slides further in post-market trading with worst plunge since 2020 that wiped out $416 billion
Nvidia has suffered its worst day of losses since March 2020.
During regular trading hours, Nvidia dropped nearly 10 per cent during regular trading on Tuesday, wiping $US279 billion ($A415 billion) off its market cap.
Nvidia shares fell an additional 2 per cent in extended trading Tuesday after Bloomberg reported that the company received a subpoena from the Department of Justice as part of an antitrust investigation.
Sign up to The Nightly's newsletters.
Get the first look at the digital newspaper, curated daily stories and breaking headlines delivered to your inbox.
By continuing you agree to our Terms and Privacy Policy.Chip stocks have been rising in the past year on optimism that the artificial intelligence boom will require companies to buy more semiconductors and memory to keep up with rising computational requirements for AI applications.
The sector has been led by Nvidia, which which dominates the market for AI data centre chips. The stock is still up 118 per cent in 2024.
The DOJ probe has not reached the stage of a formal complaint, according to Bloomberg, and the agency is asking questions about whether Nvidia makes it harder to switch to other suppliers of AI chips.
Nvidia has more than 80 per cent of the market for data centre AI chips, according to industry estimates.
Nvidia’s huge rise in recent years has been directly tied to its dominance in AI chips for data centres, established years before competitors AMD and Intel started taking the category seriously.
Nearly a decade ago, Nvidia developed a programming language for its chips, called CUDA, which is a key tool for engineers who train advanced AI models like the one at the heart of ChatGPT.
Many of Nvidia’s top customers are cloud companies as well as internet giants, including Microsoft, Alphabet, Meta, Amazon and Tesla.
As Nvidia’s AI chips have become a hot commodity, the company has released new enterprise software subscriptions and marketed its networking products as important complements to get the most out of its chips.
Recent versions of Nvidia’s chips can come pre-installed in entire Nvidia-designed server racks, an example of Nvidia’s effort to move from being a mere parts supplier to an entire systems provider.
A representative for Nvidia told CNBC that the company “wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.” The DOJ declined to comment to CNBC.
