Why Nvidia Stock Is Falling Again Today

Nvidia (NVDA -4.54%) Stocks are getting hit by another day of heavy selling on Friday. The company’s stock price was down 4.5% at 1:15 p.m. ET, according to data from S&P Global Market Intelligence.

Nvidia shares are losing ground on the disappointing jobs report released today by the US Labor Department. Recent news of an investigation into the company by the Department of Justice (DoJ) on antitrust grounds is also playing a role in the pullback.

Disappointing jobs numbers drag down Nvidia stock

Beginning in 2022, the Federal Reserve began an aggressive campaign of interest rate hikes aimed at combating rising inflation. The US central bank sought to create a soft economic landing that would slow the currency’s devaluation while avoiding a recession.

While the Fed is expected to finally deliver an interest rate cut later this month, investors have recently become more skeptical about the likelihood of the soft landing scenario coming to fruition. The jobs report out today from the Labor Department provided the latest bad news on that front, with Nvidia and other growth stocks being hit particularly hard.

The U.S. added 142,000 jobs in August, according to the data — falling short of Wall Street’s average target of 160,000 new jobs. The size of the rate is particularly notable as analysts and economists have already begun to revise targets downward in light of other economic indicators. For example, investors received news earlier in the week that US manufacturing output fell again last month. So while the much-anticipated pivot to interest rate cuts now appears to be imminent, investors may not get the bullish macroeconomic environment they had hoped for.

Is Nvidia in danger of an antitrust lawsuit?

On Tuesday, Bloomberg published a report stating that Nvidia has received a subpoena from the Department of Justice as part of an antitrust investigation. The media institute first reported on the probe in June, and its subpoena report raised concerns that the investigation was intensifying and prompted a sell-off in the artificial intelligence (AI) leader’s stock.

Nvidia publicly responded to the Bloomberg report yesterday and said it was not subpoenaed by the DoJ, which helped the stock rebound, but the possibility of a looming antitrust lawsuit was brought back into the spotlight. In a report published today, Business Insider detailed a letter written by Sen. Elizabeth Warren expressing support for an antitrust investigation into Nvidia. Warren expressed concern that the company has become too influential in the AI ​​space and said its dominant position in the market poses “serious economic risks.”

Nvidia’s advanced graphics processing units (GPUs) have become the core hardware for AI training and other applications, and the company has a dominant leadership in the product category. But while the company dominates the advanced GPU market, it’s not clear that the DoJ would win an antitrust lawsuit against the company even if it decided to pursue such an action.

For risk-tolerant investors willing to accept volatility, recent pullbacks in Nvidia stock could be a worthwhile buying opportunity.