AI chip giant NVIDIA’s market value surpassed the $3 trillion mark for the first time on Wednesday. However, after news emerged of NVIDIA founder Huang Renxun planning to sell part of his holdings and the United States launching an antitrust investigation into NVIDIA, the stock price plummeted by nearly 6% on Thursday, closing down 1.14% and falling below the $3 trillion market value, allowing Apple to reclaim the position of the second-largest company by market value.
Earlier this year, NVIDIA’s stock price has surged by nearly 150%, with a 5.16% increase on Wednesday, bringing the market value to $3.011 trillion, making NVIDIA the second-largest company in the world, surpassing Apple.
The drop in NVIDIA’s stock price on Thursday may be related to two main reasons. According to the latest regulatory filings submitted by NVIDIA to the SEC, Huang Renxun has planned to sell up to 600,000 shares of NVIDIA holdings by March 31, 2025, with a total value of $735 million based on NVIDIA’s closing price of $1,224.40. The 10b5-1 rule of the U.S. Securities Exchange Act allows senior executives of public companies to establish predetermined trading plans to automatically execute trades when certain conditions are met, to prevent insider trading using undisclosed material information.
Additionally, according to sources cited by The New York Times, the U.S. Department of Justice and the Federal Trade Commission (FTC) have reached an agreement to launch an antitrust investigation into the dominant positions of Microsoft, OpenAI, and NVIDIA in the AI industry. The investigation will focus on whether NVIDIA has violated antitrust laws, while the FTC will investigate the practices of ChatGPT developer OpenAI and Microsoft. This investigation signals a potential shift in regulatory scrutiny towards NVIDIA, Microsoft, and OpenAI in the rapidly growing AI industry.
If NVIDIA’s stock price continues to decline due to these factors, weakening the AI sector, it is likely to have a ripple effect on the U.S. stock market and could potentially impact the cryptocurrency market, leading to a short-term decline in the market.