Nvidia stock drops after DOJ launches probe of $20B Groq licensing agreement

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Nvidia drops 2.64% on DOJ probe

Highlights

The U.S. Department of Justice is investigating Nvidia's $20 billion AI chip licensing deal with Groq for possible antitrust violations.
The probe introduces new legal and operational risks for Nvidia, raising uncertainty about its growth and future agreements.
Nvidia stock declined 2.64% to $217.77, trades below key moving averages, with upcoming range expected between $212.13 and $223.6.

Antitrust probe triggers investor caution amid risk to growth strategy

The U.S. Department of Justice has initiated an investigation into Nvidia's recent $20 billion licensing agreement with AI chip developer Groq due to potential antitrust violations, according to Investing.com. The regulatory probe introduces increased legal and operational risk, raising concerns among investors about possible limitations on future deals or business expansion. This heightened scrutiny has contributed to a more cautious market tone as participants reassess the broader implications for Nvidia's growth strategy.

Intraday selling dominates despite bullish signals and mixed momentum

On the technical side, NVDA is positioned below the MA-20 at $222.79 and MA-50 at $220.66 on the working timeframe, but remains above the MA-200 at $197.08 on the daily chart. Immediate resistance is marked by the Ichimoku Kijun at $221.07, with near-term support at $212.13. Among indicators, MACD is signaling Strong Buy and ADX shows a Buy, while RSI stands at 52.54 and also gives a Buy signal. Stoch RSI is oversold, CCI is neutral, Bull/Bear Power is also in oversold territory, and the Awesome Oscillator is neutral, painting a mixed momentum profile with seller dominance seen intraday.

Directional breakout hinges on resistance breach or support failure

Over the coming sessions, NVDA is expected to trade within a volatility band between $212.13 and $223.6. There is an estimated 75% probability for an upward move toward the key resistance at $221.07, while the chance of a downward move below support at $212.13 stands at 25%. A sustained consolidation scenario would likely see price action remain mostly sideways within these bounds. A bullish scenario will require a decisive breakout above $221.07, whereas a break below $212.13 could signal a shift to a more bearish dynamic.

Viktoras Karapetjanc, expert at Traders Union, sees the DOJ investigation as a potential headwind for Nvidia, but he notes the fundamental outlook remains strong with robust momentum signals still present. He believes the cautious sentiment from regulatory scrutiny could slow price action, yet the medium- to long-term growth narrative is intact. The analyst expects the $212.13–$223.6 band to hold in the short term, with buyers having a clear edge if $221.07 breaks. "In my view, Nvidia’s underlying growth story still justifies optimism — temporary legal obstacles are unlikely to derail long-term upside."

Earlier, analysts noted that Nvidia was facing heightened regulatory risks while technical signals pointed to a vulnerable price structure. The latest developments reinforce these concerns, highlighting the importance of monitoring the $212.13 support as a trigger for further downside or potential volatility in the sessions ahead.

Source of Data: NVDA Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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