A French antitrust regulator has confirmed a probe into Nvidia (NASDAQ:NVDA). According to the Autorité de la concurrence, the artificial intelligence (AI) leader may face charges if the investigation finds it guilty of anti-competitive practices.
This news follows a July 2 report from Reuters that suggested antitrust charges against Nvidia were likely. Now, NVDA stock is fluctuating today on news that the agency is moving ahead with this investigation.
If the company is charged, it could pose negative consequences for Nvidia share prices. As of now, however, the market doesn’t seem to be too concerned with this development.
What’s Happening With NVDA Stock?
Despite falling as markets opened today, NVDA stock has since reversed course and is slowly trending upward. While still in the red, shares have rallied through some volatility and may pull into the green by the close of markets, even as news of the probe continues to trend.
While this investigation into Nvidia is certainly not good news, it isn’t necessarily a reason for investors to panic. NVDA stock is still one of the market’s strongest performers and the company has a lot to offer. Even if Nvidia is found guilty of anti-competitive practices, demand for its products won’t dissappear. As InvestorPlace contributor Chris Markoch reports:
“Companies in every sector are racing to create artificial intelligence (AI) applications. And NVIDIA is creating the hardware that these companies need to power those applications. For much of the last 18 months, investors have shrugged off any concerns about a lofty valuation. And for the most part, the company has delivered the revenue and earnings outlook to reassure them. Investors are expecting more of the same, and that’s why it will be a report to watch.”
Indeed, Nvidia has been a highly consistent performer, rising more than 125% over the past six months. While the company is still recovering from the recent stock split, it is well-positioned to continue making progress back toward previous prices.
Why It Matters
As always, it’s important for investors to look beyond the headlines and see the bigger picture when it comes to NVDA stock. Right now, that picture shows that Nvidia isn’t being kept down by news of the probe. This suggests that, even if the investigation heats up, NVDA won’t falter by too much and will ultimately overcome the turmoil. Many leading tech companies have faced regulatory probes before and managed to recover just fine. There’s no immediate reason to suspect this time will be any different.
On the date of publication, Samuel O’Brient held a LONG position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
