Nvidia (NVDA +3.97%) stock is getting hit with another day of big sell-offs Friday. The company's share price was down 4.5% as of 1:15 p.m. ET, according to data from S&P Global Market Intelligence.
NASDAQ: NVDA
Key Data Points
Nvidia stock is losing ground in conjunction with an underwhelming jobs published by the U.S. Labor Department today. Recent news about 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 are dragging Nvidia stock down
Starting in 2022, the Federal Reserve began an aggressive campaign of interest rate increases designed to combat roaring inflation. The U.S. central banking authority had sought to engineer an economic soft landing that would slow currency devaluation while also avoiding a recession.
While the Fed is widely 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 being achieved. The jobs report published by the Labor Department today have provided the latest bit of bad news on that front, and Nvidia and other growth stocks are getting hit particularly hard.
According to the data, the U.S. added 142,000 jobs in August -- falling short of the average Wall Street target's call for 160,000 new job additions. The size of the miss is particularly notable because analysts and economists had already started to revise targets downward in light of other economic indicators. For example, investors received news earlier in the week that U.S. manufacturing production had declined again last month. So even though the long-awaited pivot to rate cuts now appears to be imminent, investors may not be getting the bullish macroeconomic backdrop they had hoped for.
Is Nvidia in danger of an antitrust suit?
On Tuesday, Bloomberg published a report stating that Nvidia had received a subpoena from the Justice Department as part of an antitrust investigation. The media outlet first reported on the probe in June, and its subpoena report raised concerns that the investigation was escalating and prompted sell-offs of the artificial intelligence (AI) leader's stock.
Nvidia responded publicly to Bloomberg's report yesterday and stated that it had not been subpoenaed by the DoJ, which helped spur a rebound for the stock, but the possibility of a looming antitrust suit was thrust back into the spotlight. In a report published today, Business Insider detailed a letter written by Senator Elizabeth Warren voicing support for an antitrust investigation into Nvidia. Warren raised concerns that the company has become too influential in the AI space and stated that its dominant market position posed "dire economic risks."
Nvidia's advanced graphics processing units (GPUs) have become the foundational hardware for AI training and other applications, and the company has a commanding lead in the product category. But while the company dominates the advanced GPU market, it's not clear that the DoJ would win an antitrust suit against the company even if it decided to pursue such action.
For risk-tolerant investors willing to embrace volatility, recent pullbacks for Nvidia stock could be a worthwhile buying opportunity.
