NVIDIA lost $280b in one day: What’s happening

Tech giant Nvidia has broken a record by losing more than $280 billion in market value in a single day. What caused this dramatic collapse?

According to Bloomberg, the U.S. Department of Justice has issued subpoenas to Nvidia and several other companies as part of its antitrust investigation. The department had previously limited itself to non-binding surveys, but has now decided to take more decisive action.

Nvidia shares responded to the news with a sharp decline, falling 9.5% to $108 by the close on September 3 and falling another 2% to $105 on the market.

Source: TradingView What is being said about the Nvidia call and why is Nvidia closed?

As for Nvidia, antitrust authorities are concerned about allegations that the company is making it harder for customers to switch to other chipmakers and AI services, and that it is only penalizing customers who don’t use its own AI services.

The Justice Department has contacted other tech companies, including Nvidia’s largest investor, Microsoft, for additional information as part of the investigation.

However, the company denies all the allegations. In an official statement to Bloomberg, Nvidia representatives emphasized that the company wins in line with its own values, as reflected in our test results and the value it provides to customers who can choose any solution that suits them.

How did the Nvidia investigation affect the crypto market?

Nvidia has quickly become the world’s largest maker of computer chips, particularly those used in artificial intelligence processes. While the company is not directly involved in cryptocurrency, the AI ​​token sector tends to respond to broader news.

Thus, according to CoinGecko, the market value of the AI ​​token sector fell by more than 6 percent due to the problems experienced by Nvidia, and the top five tokens in this sector also experienced price losses.

Source: CoinGecko

Leading the decline among AI-related crypto assets was Carbon Browser (CSIX), which fell 14% in a day to $0.01693, followed by NEURALAI (NEURAL), which fell 14% to $2.45.

Financial report and Nvidia buyback had a negative impact on crypto

Most AI-related tokens fell about 5% between August 27 and 28. The decline came on the eve of Nvidia’s earnings report, when its board of directors approved a $50 billion Nvidia stock buyback.

Thus, NEAR Protocol (NEAR) fell by 4.45%, Artificial Superintelligence Alliance (FET) fell by 2.1%, and Injective (INJ) fell by 7.87%. The market value of the sector fell by 6% to $23.9 billion.

But, as a rule, shortly before the release of Nvidia’s report, the price of AI tokens increases. For example, in March 2024, coins from this sector rose by about 25% before the company’s conference. However, this time they responded with a decline.

What do analysts say?

Analysts at trading firm QCP Capital said Nvidia’s financial report caused a negative reaction among investors and put pressure on stock and crypto markets.

Following the release of Nvidia’s quarterly earnings report, the first cryptocurrency saw its volatility increase but then began to decline. QCP Capital believes investors are expecting more impressive results from the AI ​​chip leader.

Will we see further declines as we enter Q4? With no near-term catalysts, we expect prices to continue to fall in range as we enter September.

Analysts expect the decline in stock and crypto markets to be short-lived. With the US Federal Reserve beginning its rate-cutting cycle, increased liquidity will eventually boost risk assets.

What’s Nvidia’s next step?

Nvidia’s stock has been falling amid macroeconomic indicators and the threat of a recession across the U.S. The U.S. Justice Department is also looking into Nvidia, which is suspected of abusing its dominant position in the chip market.

U.S. antitrust authorities are concerned that Nvidia is making it harder for companies to switch to other AI and computer chip suppliers, and is even imposing fines on customers who don’t use its AI services alone.

In the era of AI development, Nvidia remains one of the major “beneficiaries”; it controls 70-95% of the microchip market, thereby putting significant pressure on the AI ​​token market.