To The Moon

On September 4, 2024, I made an additional investment in Nvidia (NVDA) $NVIDIA Corp(NVDA)$  stock amidst a tumultuous period for the company. The stock price dropped by 1.66% to $106.21, following a significant 9.5% plunge the previous day, which marked the largest single-day loss for the company since its listing. These sharp declines were primarily driven by a Bloomberg report suggesting that the U.S. Department of Justice (DOJ) was collecting evidence of potential antitrust violations, allegedly sending subpoenas to Nvidia and other companies.

Key Factors Behind the Stock Price Movement:

DOJ Antitrust Investigation Concerns: The stock's significant drop was precipitated by concerns over Nvidia's growing dominance in the AI chip market and the DOJ’s inquiry into its acquisition of RunAI. Nvidia denied receiving any subpoenas and emphasized its willingness to cooperate with regulatory authorities. Despite Nvidia’s response, uncertainty lingered in the market over whether the DOJ’s actions could potentially hinder the company's future growth, especially in its AI-related ventures.

Market Sentiment and Reaction: Investor confidence appeared to falter as the market speculated on the possible implications of the DOJ investigation. Nvidia has been a key player in AI and data center chips, and any regulatory hurdles, such as antitrust investigations, could present challenges to its continued market dominance.

Long-Term Fundamentals: Despite the near-term volatility, Nvidia's strength lies in its technological prowess, which continues to attract clients across various industries, particularly those relying on AI and data center infrastructure. The company has reiterated its commitment to providing value and innovation, which underpins its long-term potential.

Reflection on the Investment:

From a long-term perspective, I recognize that the current situation may present a buying opportunity. Nvidia remains a market leader in AI chips and GPUs, with strong revenue growth prospects from key areas such as artificial intelligence, gaming, and cloud computing. Short-term price declines, fueled by external concerns such as regulatory investigations, may create opportunities for long-term investors to accumulate shares at a discounted price.

However, the DOJ inquiry introduces an element of risk. Regulatory scrutiny could slow Nvidia's strategic acquisitions and its broader AI ambitions. For this reason, monitoring the progress of the investigation will be crucial, as well as keeping a close watch on any further statements from Nvidia or regulatory bodies.

Conclusion:

While this investment was made during a time of heightened uncertainty, Nvidia's technological capabilities and its dominant position in the AI industry remain compelling. The current challenges, though significant, do not appear to undermine Nvidia's long-term potential. I will continue to assess developments in the regulatory landscape, but for now, I believe Nvidia’s fundamentals justify maintaining a long-term position.

$NVIDIA Corp(NVDA)$