The U.S. Department of Justice (DOJ) issued subpoenas to Nvidia (NVDA) and other companies Tuesday. The subpoenas come as the DOJ continues its antitrust probe into Nvidia over its dominance of artificial intelligence (AI) processors, according to a report by Bloomberg. Nvidia's stock is trading lower Wednesday in response, adding to Tuesday's massive decline.
The subpoenas were issued to Nvidia and other technology companies to gather information and determine whether the California-based semiconductor firm is making it difficult for customers to switch suppliers and penalizing those who do not use its chips exclusively, Bloomberg said, citing people familiar with the matter.
"Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them," the company said in an emailed statement to Bloomberg. The DOJ declined Bloomberg's request for comment.
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The subpoenas reportedly put the Department of Justice one step closer to launching a formal complaint.
Is Nvidia stock a buy, sell or hold?
Even though Nvidia has pulled back sharply in recent weeks, it's still up nearly 120% for the year to date and remains a long-time market beater. And Wall Street continues to think it's one of the best stocks to buy.
According to S&P Global Market Intelligence, the average analyst target price for NVDA stock is $148.66, representing implied upside of roughly 40% to current levels. Additionally, the consensus recommendation is a Strong Buy.
Financial services firm CFRA Research has a Buy rating on the semiconductor stock with a $139 price target.
The company's better-than-expected second-quarter earnings results and upbeat third-quarter guidance increases confidence about demand for its H100 and H200 chips ahead of next year's Blackwell ramp, said CFRA Research analyst Angelo Zino in an August 29 note.
"Bears will point to slowing sequential demand, recent margin pressures, and cycle concerns," he adds. "While those concerns will remain, investors should be more focused on AI structural gains and total addressable market expansion, a higher data center mix vs past cycles, and rising demand from non-hyperscalers."
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