Nvidia’s Biggest Ever Market Cap Loss: $278 Billion Wiped Out in a Day

• September 3 was a dark day for Nvidia. In a single day, it lost $278 billion from its market value.
• This shocking loss was triggered by a subpoena filed against the company by the DoJ over some antitrust investigation.
• Its current market cap is $2.65 trillion, which is still much larger than its rival AMD.

Nvidia suffered the biggest one-day market cap loss, losing almost $278 billion in value after the United States Department of Justice (DoJ) reportedly filed an antitrust subpoena against it.

On September 3, its share prices fell by 9.5% by the time the market closed and continued to fall by more than 2% (hitting a new low of $105) in after-hours trading.

This is one of the biggest one-day drops in the history of US stocks. The previous record was held by Meta which suffered a $232 billion loss in one day in February 2022.

Credit: TradingView

The loss was not just limited to Nvidia. Since its value chain extends to many companies, any entity remotely involved with it also suffered a loss. For example:

• SK Hynix, which provides high bandwidth memory chips to Nvidia, lost 8%.
• Semiconductor testing equipment supplier Advantest also lost nearly 8%.
• TSMC, which manufactures Nvidia's GPUs, lost 5%.

Why Is the DoJ After Nvidia?

The reason behind this sudden drop is a subpoena issued by the DoJ concerning an antitrust investigation. The DoJ's San Francisco branch will be taking the lead on this case.

The officials are worried that Nvidia is making it difficult for its customers to switch to other providers.

• Some people familiar with the matter also revealed that it has penalized some of its buyers for not exclusively using its services. This is what triggered the investigation.
• It started with the DoJ sending non-binding questionnaires to Nvidia to seek further information.
• But the subpoena marks an escalation as the company will now be compelled to hand over documents the authorities are seeking.

The investigation will also look into its acquisition of RunAI - a deal that was announced in April. RunAI makes software for managing AI computing and the authorities are worried that this move will make it even more difficult for customers to leave Nvidia.

What Does Nvidia Have to Say About This?

Nvidia has obviously denied these allegations. It said that its customers are free to choose whatever products work best for them.

'Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them' - Nvidia

However, Nvidia CEO Jensen Huang did add that loyal Nvidia customers are prioritized in the ready-to-go data centers - a facility designed to prevent stockpiling and speed up installation.

Nvidia is not the only one who is being questioned in this investigation. Other tech firms, including Microsoft (Nvidia's biggest investor), are also being questioned.

Just earlier this year, we noticed how Nvidia is quickly growing its market value. In just 67 days, it managed to add $ 1 trillion to its market cap, bringing the total value to $2.28 trillion.

So although it was a massive loss, it still has a staggering market cap of $2.65 trillion, making it at least 12 times bigger than its rival AMD.

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