NVIDIA’s NASDAQ: NVDA The stock price fell after reports that China is investigating it for violating its anti-monopoly laws. This move could affect NVIDIA’s business; About 15% of China’s annual income, but how far is China willing to go? NVIDIA’s chips and CUDA framework are essential to harness the power of AI today; China’s investigation is more of a warning than a real threat.
NVIDIA has competitors, and Advanced Micro Devices NASDAQ: AMD There is one, but it’s still in catch-up mode, leaving China with few options other than to slap NVIDIA on the wrist and let it go about its business. As for who the warning is for, it’s questionable whether it was for NVIDIA, the United States government, or both. The probe could be China’s retaliation for US semiconductor sanctions, raising tensions. 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 a networking company focused on the enterprise. Its fabless operations included a variety of adapters, switches, cables and other silicon products for high-performance computing, data center, cloud, and data storage.
NVIDIA announced plans to acquire the company in 2019 and closed the deal in 2020 for a valuation of $6.9 billion. Today, Mellanox is part of NVIDIA’s networking business, which includes high-speed Ethernet and Infiniband solutions. China is angry that NVIDIA did not disclose Mellanox product information within a 90-day window to prevent a monopoly.
Meanwhile, the US Department of Justice is investigating whether NVIDIA made it difficult for consumers to obtain rival products. Whether NVIDIA’s response is actively working against its rivals remains to be seen. Still, it will likely focus on the fact that its products set the stage for a technological revolution that CUDA unlocks.
Is it hard for NVIDIA? Semiconductor Rivals to compete? Yes it is. They are years behind the curve in developing similar technology and support infrastructure and demand for these products is high. The question is whether NVIDIA has market share to lose, and the answer is yes.
Most AI developers don’t care if the data center has NVIDIA, Advanced Micro Devices, or other labels as long as it can handle the workload, train the models, and power the apps.
what to do Analysts think About the China investigation? Not a lot, at least not enough for any revisions to show up soon after release. The news certainly raises some questions, but the takeaway is that revenue and earnings The outlook for development has not changed. As it is, the consensus reported by MarketBeat predicts another 50% increase in 2025, enough to put revenue growth close to 6500% since 2020 when the AI boom was starting. Based on trends, the forecast is lower, and NVIDIA will outperform.
Institutional and fund money flows into NVIDIA
NVIDIA stock forecast today
$164.15
Up 15.24%buy medium
Based on 43 analyst ratings
| High forecast | $200.00 |
|---|---|
| Average forecast | $164.15 |
| Less predictable | $85.00 |
Institutional activity shows that market support for NVIDIA remains high. The balance of activity has been bullish all year and is unlikely to change unless there is a clear signal business is peaking. Until then, institutional activity is a tailwind for the market that will likely support it on dips like the one created by the Mellanox probe news.
The market for NVIDIA stock is down more than 2.0% but is still above critical support targets and showing support intraday. The likely scenario is that NVIDIA stock continues to move sideways within its range, with the possibility of establishing a new high by the end of the year or early 2025. Analysts’ consensus price target points to a 15% upside from the 150-day EMA. In early December; The revision moves to the high-end range of trend targets or another 15% upside.
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