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It\u2019s too early to say whether rumors of a Department of Justice (DOJ) probe<\/a> into Nvidia<\/a> will stop its runaway stock, according to Bank of America<\/a>.\u00a0<\/p>\n So for now, investors can rest easy. \u201cUntil we have more details, we assume no specific material impact on NVDA\u2019s fundamental opportunity,\u201d Bank of America analysts wrote in a note published on Thursday.\u00a0<\/p>\n On Tuesday, Bloomberg<\/em> reported<\/a> the DOJ sent Nvidia subpoenas<\/a> relating to a possible antitrust investigation. The DOJ is reportedly looking into<\/a> whether Nvidia made it harder for buyers of its AI chips to switch to other vendors and whether it unfairly penalized customers that didn\u2019t exclusively use its chips.\u00a0\u00a0<\/p>\n In a statement to Fortune<\/em>, Nvidia denied it had been subpoenaed. \u201cWe have inquired with the U.S. Department of Justice and have not been subpoenaed,\u201d a spokesperson said in an email. \u201cNonetheless, we are happy to answer any questions regulators may have about our business.\u201d The company also said it \u201cwins on merit\u201d and that customers are free to choose \u201cwhatever solution is best for them.\u201d<\/p>\n A spokesperson from the San Francisco office of the Department of Justice, which is reportedly overseeing the inquiry, declined to comment, citing departmental policy. Bank of America did not respond to a request for comment.<\/p>\n The supposed inquiry into Nvidia\u2019s dominance in the AI industry began in June, according<\/a> to Bloomberg<\/em>.\u00a0<\/p>\n It is still too early to know the exact nature of the DOJ\u2019s investigation\u2014assuming there even is one\u2014nor whether it will result in a formal complaint. While issuing subpoenas is a clear step in that direction, Bank of America emphasizes that it has \u201cno specific insight into any specific outcome,\u201d leaving it in a holding pattern.\u00a0\u00a0\u00a0<\/p>\n As such, Bank of America reiterated its Buy rating, still considering Nvidia a top pick in the tech sector, according to the analyst note. On Thursday, Nvidia\u2019s stock sat at $106.83, having risen 121% this year. Bank of America maintained its price target<\/a> of $165, which implies the bank still sees 54% upside in the stock. However, over the past five days Nvidia\u2019s fell<\/a> 12%.\u00a0<\/p>\n Bank of America highlighted three points in Nvidia\u2019s favor:\u00a0<\/p>\n Each of those was meant as some early evidence that Nvidia\u2019s dominance in the chip market was unlikely due to foul play, according to Bank of America.\u00a0<\/p>\n \u201cNvidia\u2019s cloud customers are some of the most sophisticated and resourceful in their ability to source chips from multiple vendors, including their internal custom chips,\u201d Bank of America\u2019s note reads.\u00a0<\/p>\n There is also truth to the fact that Nvidia\u2019s chips do in fact outperform those from its competitors. It regularly scores better than them on the MLPerf industry benchmarks. That led Nvidia to an estimated 75% to 90% market share of the AI chip market, according<\/a> to CNBC<\/em>. Last month, as Wall Street eagerly awaited Nvidia\u2019s latest earnings report there were rumblings that overall demand for AI chips was slowing. Nvidia smashed<\/a> those concerns, when it reported a 122% increase<\/a> in revenue.\u00a0<\/p>\n Nvidia is also hardly the only big tech company facing an antitrust probe. Apple<\/a> and Alphabet<\/a> are also caught up in cases regarding their business practices. A fact that Bank of America analysts acknowledged, noting, \u201cwhile every case is different, we also highlight the plethora of government cases ongoing against other large US tech companies over the last several years.\u201d\u00a0<\/p>\n Stocks for Alphabet and Apple have, so far, remained immune to their respective investigations. This year, Alphabet Class A and Class C shares are up 13% and Apple\u2019s rose just under 20%.<\/p>\n<\/div>\n\n\n
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