Nvidia's Groq Deal Draws DOJ Scrutiny as Wall Street and Washington Tell Two Different Stories
Published on 09/11/2026 at 05:30 | Editorial boerse-global.de
Two narratives are colliding around Nvidia this week, and the stock is caught in the middle. On one side sits a bullish analyst call that crowns the chipmaker the undisputed champion of AI computing. On the other, a federal antitrust inquiry that questions whether the company's dealmaking has quietly sidestepped regulatory review. The tension between those two stories explains why the shares have been drifting even as the fundamental case remains formidable.
A Licensing Arrangement Under the Microscope
Bloomberg reports that the U.S. Department of Justice is examining whether Nvidia structured its December-announced $20 billion licensing agreement with AI chip startup Groq specifically to dodge mandatory antitrust notification. At issue is whether what amounts to a de facto purchase of most of Groq's assets was dressed up as a simple "license" to stay beneath the HSR threshold.
The probe lands as Nvidia pushes well beyond its traditional graphics chip business. In early September, the company disclosed in a mandatory filing the acquisition of Hugging Face, Inc. for $12.93 billion — a deal that underscores how aggressively it is widening its footprint. Earlier scrutiny of other acquisitions and minority stakes had already put Nvidia on regulators' radar; what makes this inquiry different is that it concerns the form of a transaction rather than its size.
That distinction cuts to an uncomfortable question: can a company with Nvidia's commanding market position sign ordinary licensing contracts at all without drawing suspicion? The very dominance that antitrust enforcers now scrutinize is the same dominance analysts cite when they justify their price targets. Success, in other words, is generating its own threat.
Piper Sandler Opens Coverage With a $300 Target
The bullish counterweight arrived Thursday from Piper Sandler, which initiated coverage with a $300 price target. Analyst David O'Connor described "insatiable demand" for computing capacity, propelled by so-called agentic AI. Nvidia commands 80% market share in AI compute and a 50% unit share — a position the firm views as nearly unassailable for years to come.
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Piper Sandler projects revenue growing at a 47% compound annual rate through fiscal 2030, with earnings per share climbing to $30. On roughly 14 times estimated 2028 earnings, the argument goes, the valuation still looks reasonable.
Phillip Securities had already raised its own target on September 3, lifting it from $285 to $300 while reaffirming a buy rating, citing robust demand for AI servers and expansion into custom chips and the automotive sector.
Fundamentals Stay Robust
The numbers backing those calls remain striking. For the second quarter of fiscal 2027, which ended July 26, Nvidia posted revenue of $96.2 billion — up 106% year over year. Gross margin came in at 75.0% on both a GAAP and adjusted basis, with earnings per share of $2.46 and $2.22, respectively.
Management guided third-quarter revenue to $108.0 billion, give or take 2%, and notably excluded any data-center revenue from China from that forecast. CFO Colette Kress expects 70% revenue growth in fiscal 2028 and described the outlook to Yahoo Finance as "supply-constrained" — a signal that demand continues to outstrip what the company can ship.
Speaking at Goldman Sachs' Communacopia + Technology conference, CEO Jensen Huang pointed to cybersecurity as the likely next major application for artificial intelligence, according to Bloomberg.
Insider Sales and a Notable Retreat
Ownership activity has added another layer of noise. Director Mark A. Stevens sold 1,848,501 shares through a trust at prices between $220 and $226, retaining more than 26.5 million shares directly and indirectly afterward. He also filed a Form 144 to dispose of five million Class A shares worth roughly $1.09 billion. Separately, Stevens offloaded approximately $646.5 million in stock last week. Such filings routinely make investors jittery, even when the seller keeps a substantial stake.
On the other side of the ledger, investor Michael Burry has closed out his Nvidia put options expiring in December 2026 without rolling them over — a move that reads more like tactical risk reduction than capitulation, particularly since he continues to hold short positions via 2027 options.
Building the Next Growth Chapter
None of the regulatory noise has slowed Nvidia's product and partnership offensive. Alongside Palantir, the company unveiled a sovereign AI platform for critical supply chains — with Nvidia itself as the first customer. Each rack of the forthcoming Vera Rubin generation comprises roughly 1.3 million individual components sourced from thousands of suppliers, and the new software, built on Nemotron models and Palantir's Foundry platform, is designed to make that complexity manageable. The message to employees and investors alike: Nvidia treats its supply-chain challenge not merely as a cost to absorb but as a business line in its own right.
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International expansion continues apace. With Microsoft, Nvidia presented new tools for AI agents running on its own hardware at IFA 2026, and in Australia it is significantly scaling AI infrastructure with local partners through 2027.
Charting the Middle Ground
The technical picture offers little clarity either. The stock trades about 1.8% above its 50-day moving average of EUR 184.70 — neither deeply weak nor overextended. It sits roughly 7% below its 52-week high of EUR 202.50, reached in May, while remaining 11% above its 200-day average, keeping the longer-term uptrend intact despite recent softness.
In U.S. trading, the shares fell more than 2% by midday to just above $218, while German trading saw the stock at EUR 187.94, down 2.3% on the day. The prior session closed at EUR 188.14, a decline of 2.2%. Thursday also marks the ex-dividend date for the quarterly payout of $0.25 per share, payable October 1.
The question that emerges from all of this is not whether Nvidia keeps growing — few seriously doubt that. It is whether a company that has become, almost by definition, the bottleneck of the entire AI industry can retain that role without regulators eventually stepping in. That answer no longer rests with Nvidia alone.
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