Investors pushed the sell button on shares of Nvidia Corp. on Friday after the graphics chip maker stirred up Enron-like jitters with news that it was the subject of a federal accounting investigation.

Even as Wall Street brokerages rushed to defend the company and reiterated recommendations to buy the stock, the shares closed down $4.81, or 7.7 percent, to $57.35, on Nasdaq, where it was among the most active issues on volume of more than 33 million shares.

Nvidia stock was the best performer in the Standard & Poor's 500 <.SPX> index last year, a distinction it inherited from Enron Corp., the index's best performer of 2000. Enron has since fallen apart in an explosive accounting and ethics scandal. 

Even with Friday's stock drop, Nvidia shares are still trading more than three times higher than in January 2000. 

Wall Street had flocked to Nvidia, attracted by its valuable relationships with computer and video game system makers, including Microsoft Corp. , which uses Nvidia chips in its Xbox game system. 

In November, Nvidia was hit by news of an inquiry into alleged insider trading by company employees. The latest SEC probe stemmed from the commission's review of e-mail messages Nvidia had provided as part of the insider trading inquiry. 

On Thursday, Nvidia said the SEC was looking into the timing of up to $3.6 million in product costs recorded in the second and third quarters of its 2001 fiscal year. 

In addition, the company said the SEC was examining the recording of reserves in the fiscal 2000 fourth quarter and the fiscal 2001 first quarter. Nvidia's fiscal year ends in January. 

The sell-off came even though Nvidia on Thursday reported stronger-than-expected earnings for the fiscal 2002 fourth quarter. Profits more than doubled amid strong sales of the game consoles and computers that use its chips to display complex graphics. 

The SEC inquiry comes in the context not only of the Enron scandal, but amid the swelling number of technology companies facing informal or even formal inquiries into their accounting. Telecommunications companies Global Crossing Ltd. and Britain's Cable & Wireless Plc are two such firms facing scrutiny. 

Even blue-chip International Business Machines Corp. has been affected, with its shares dragged down on Friday over a report on concerns about how it accounted for an asset sale. 

STOCK DOWN, BUT 'BUY' RATINGS STAND 

Brokerage firms sent out research notes early Friday backing up Nvidia. 

"We believe that the accounting questions facing NVDA are relatively benign," Morgan Stanley analyst Mark Edelstone wrote in a research note, using the stock symbol for Nvidia. 

"We believe NVDA remains one of the most attractive stocks in our universe," he added. Stock analysts refer to their industry coverage area as their "universe." 

At Credit Suisse First Boston, analyst Tim Mahon said the drop in Nvidia stock presented a good buying opportunity for investors. In a research note entitled "Another Record Quarter," he raised their estimate for Nvidia's fiscal 2003 earnings to $1.76 a share from $1.32 a share. 

Joseph Osha, an semiconductor analyst with Merrill Lynch, maintained his 12-month "buy" recommendation on the stock and a 3-year "strong buy" rating. 

But Osha warned in a research note that "no stock, regardless of how strong the business is, will react well to questions about accounting practices in the current environment." 

"With Nvidia now under a microscope, additional issues could come up," he wrote.