Nvidia Nasdaq: NVDA Share prices fell after reports that China was investigating it for violating antitrust laws. This move could impact NVIDIA’s business; China accounts for about 15% of annual revenues, but how far is China willing to go? NVIDIA chipsets and the CUDA framework are essential to harnessing the power of AI today; China’s investigation is likely to serve as a warning rather than a real threat.
NVIDIA has competitors and advanced Micro devices Nasdaq: AMD It is one of these companies, but it is still in catch-up mode, leaving China with few options other than to put pressure on NVIDIA and allow it to continue its business. As for who the warning is for, it’s questionable whether it’s to NVIDIA, the US government, or both. The investigation could serve as China’s retaliation for US sanctions on semiconductors, raising tensions in the global semiconductor war.
NVIDIA is under investigation for monopolistic practices in China and the United States
The potential breach relates to the acquisition of Mellanox in 2019/2020. Mellanox was an enterprise-focused networking company. Its non-deliverable operations included a variety of switches, converters, cables and other silicon products for high-performance computing, data centers, cloud and data storage.
NVIDIA announced plans to acquire the company in 2019 and closed the deal in 2020 for $6.9 billion. Today, Mellanox is part of NVIDIA’s networking business, which includes high-speed Ethernet and Infiniband solutions. China is upset that NVIDIA did not disclose Mellanox product information within a 90-day period intended to prevent monopolization.
Meanwhile, the US Department of Justice is investigating whether NVIDIA made it difficult for consumers to obtain competing products. The response to NVIDIA actively working against its competitors has not yet been determined. However, it will likely focus on the fact that its products are paving the way for a technological revolution that CUDA will open.
Is it difficult for NVIDIA semiconductor competitors to compete? yes it is. They are years behind in developing similar technology and supporting infrastructure and the demand for these products is enormous. The question is whether NVIDIA has market share to lose, and the answer is yes.
Most AI developers don’t care whether a data center has NVIDIA, Advanced Micro Devices, or any other brand as long as it can handle the workload, train models, and run applications.
What do analysts think about the Chinese investigation? Not much, at least not enough for any reviews to appear so soon after release. This news certainly raises some questions, but the upshot is that revenue and earnings growth expectations have not changed. As it stands, the consensus reported by MarketBeat expects another 50% growth in 2025, enough to put revenue growth near 6,500% since 2020 when the AI boom began. Based on trends, expectations are likely to be low, and NVIDIA will outperform.
Institutional and financing money flows into NVIDIA
NVIDIA stock forecast today
$164.15
18.26% upModerate purchase
Based on 43 analyst ratings
| High expectations | $200.00 |
|---|---|
| Average expectations | $164.15 |
| Low expectations | $85.00 |
NVIDIA stock forecast details
Institutional activity shows that market support for NVIDIA remains high. The balance of activity has been bullish all year and is unlikely to change until there is a clear sign that business has reached the top. Until then, institutional activity is a tailwind for the market that will likely support it on declines like those triggered by the Mellanox probe news.
NVIDIA stock market is down more than 2.0% but remains well above critical support targets and is showing intraday support. A likely scenario is that NVIDIA stock continues to move sideways within its range, with a chance to make a new high by the end of the year or early 2025. Analysts’ consensus target price suggests a 15% upside from the 150-day EMA . In early December. The revision trend leads to a high range of targets or another 15% rise.
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