As of 2023, Nvidia’s stock price has grown by approximately 146% year-to-date, driven by its dominant position in AI chip technology and strong demand for its GPUs.

Nvidia shares experienced their most significant single-day decline, dropping over 9% on Tuesday amid a broader sell-off in artificial intelligence (AI) stocks. The market’s retreat from AI stocks intensified following news of an antitrust investigation into Nvidia’s dominance in the AI chip supply market.

In extended trading, Nvidia’s stock fell an additional 2%, leading to a staggering market capitalization loss of nearly $300 billion (€272 billion). The drop followed reports that the US Department of Justice (DOJ) had issued a subpoena to Nvidia as part of an escalating antitrust probe.

The DOJ’s investigation, which began in June, focuses on potential antitrust violations by Nvidia and other tech giants, including Microsoft. The concern is that Nvidia’s stronghold in the global AI chip market limits customer choices, potentially forcing them to rely solely on Nvidia’s products.

Despite these setbacks, Nvidia remains one of the top-performing technology stocks this year, with its shares up 146%. However, disappointing quarterly earnings last week hinted at a slowdown in the company’s explosive growth, contributing to the recent market jitters.

The broader market also felt the impact of Nvidia’s slump, with global risk aversion driving major indices down. European benchmarks and US markets, including the S&P 500 and Nasdaq, saw significant declines as investors reacted to deteriorating economic data and global economic uncertainties.

Tuesday’s economic reports from the US, indicating a fourth consecutive month of contraction in manufacturing activities, further fueled recession fears. This added to the already prevalent concerns about the global economic outlook, especially with the Federal Reserve expected to begin cutting interest rates soon.

As global markets remain sensitive to economic indicators and central bank policies, Nvidia’s challenges reflect a broader trend of caution and risk aversion among investors. The European Central Bank’s upcoming interest rate decision later this month will be closely watched as markets brace for potential further downturns.