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NVIDIA Under Fire: China Investigates Acquisition as Stock Takes a Hit

Daniel Kim Views  

NVIDIA
NVIDIA

NVIDIA’s stock price recently declined after China announced an investigation into the company’s alleged violations of antitrust laws. Reports from China on Monday suggest that regulators are scrutinizing NVIDIA’s $6.9 billion acquisition of Mellanox, a network and data transmission company, in 2019.

Following the announcement, NVIDIA’s stock dropped by 2.92%, falling below $140. Meanwhile, the U.S. Department of Justice has been examining complaints from competitors alleging that NVIDIA is leveraging its market dominance in the chip industry. The accusations include claims that NVIDIA has threatened to penalize companies that purchase both its products and those of its competitors.

NVIDIA has become one of the largest companies in the stock market, driven by substantial investments from tech giants in its chips and data centers, which are essential for AI training and operation. The company also transformed the PC gaming market and computer graphics by introducing the graphics processing unit (GPU) in 1999.

This year, NVIDIA’s stock has nearly tripled, fueled by surging demand for AI-related products. According to FactSet, about 16% of NVIDIA’s revenue comes from China, making it the company’s second-largest market after the United States.

In its latest earnings report, NVIDIA posted $35.08 billion in revenue, marking a 94% increase from the $18.12 billion it generated the previous year. In the third quarter alone, the company recorded $19.31 billion in revenue, more than double the $9.24 billion from last year, excluding contributions from China.

NVIDIA’s market capitalization has also surged to $3.5 trillion, recently surpassing Microsoft and Apple to become the world’s most valuable company. Last month, NVIDIA replaced Intel Corporation in the Dow Jones Industrial Average, ending Intel’s 25-year tenure on the index.

Daniel Kim
content@viewusglobal.com

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