NVDA - Antitrust Scrutiny and AI Market Milestones

6. Juni

Market Chatter: Antitrust Scrutiny and Milestones in the AI and Tech Industry

• Antitrust Scrutiny for AI Dominance
  
  Microsoft ( MSFT ), OpenAI, and Nvidia ( NVDA ) are facing antitrust investigations over their dominant roles in the artificial intelligence industry, according to The New York Times. The Federal Trade Commission (FTC) and the Justice Department have agreed to proceed with these investigations. The Justice Department will lead the investigation into Nvidia, while the FTC will focus on OpenAI and Microsoft.
  
  
• Nvidia's Market Cap Controversy
  
  Nvidia Corp. ( NVDA ) has achieved a new milestone, surpassing a $3 trillion market capitalization for the first time and briefly overtaking Apple’s valuation. However, this milestone has reignited debates about its true value. Aswath Damodaran, a professor at New York University Stern School of Business and known as Wall Street’s "Dean of Valuation," believes that Nvidia’s intrinsic value does not justify its current price tag. He acknowledges the company's compelling narrative and market momentum but remains cautious about its lofty valuation.
  
  Short-Term Bets on Nvidia Ahead of Stock Split
  
  As Nvidia's stock split approaches, traders are making short-term bets on the stock's movements. Data from Cboe Global Markets shows that 19 out of the 20 most actively traded options tied to Nvidia are set to expire by the end of this week. This frenzy is reminiscent of the activity seen around Tesla's stock split in 2020. On Tuesday alone, Nvidia options worth around $283 billion were traded, dwarfing the $18.7 billion traded for Apple.
  
  
• Nvidia's Ascent in Market Valuation
  
  Nvidia has rapidly climbed the ranks of the world's largest companies. Earlier this year, it surpassed Amazon to become the third-largest US company. Recently, Nvidia overtook Apple, securing the second spot with a market value of $3.01 trillion. Nvidia's shares closed at a record $1,224.40 each. The company now aims to challenge Microsoft for the number one position, needing to gain approximately $150 billion in market value to do so.
  
  These developments highlight the dynamic nature of the tech and AI industries, with significant market movements and regulatory scrutiny shaping the landscape.