Nvidia Stock Hit Pre-Market By China’s Antitrust Investigation: Retail Looks Glum

Shares of Nvidia fell as much as 2% pre-market Monday, on track for their third session of losses, following reports that China has launched an antitrust investigation into the chipmaker.

The probe by China’s State Administration for Market Regulation (SAMR) reportedly focuses on Nvidia’s compliance with the terms of its $6.9 billion acquisition of Mellanox Technologies Ltd., approved by Beijing in 2019. 

Regulators had stipulated that Nvidia not discriminate against Chinese firms. Specific allegations remain unclear, but the move underscores China's growing scrutiny of foreign companies operating within its borders amid escalating U.S.-China tensions.

The investigation comes on the heels of Washington’s latest sanctions targeting over 140 Chinese entities, aiming to restrict China’s access to advanced chips for artificial intelligence applications. 

In response, Beijing has imposed export restrictions on critical materials like gallium, germanium, and antimony, essential for semiconductor production.

Nvidia Sentiment and Message Volume on Dec 9 as of 7:30 a.m. ET | Source: Stocktwits

Retail sentiment around the stock remained in the ‘bearish’ (41/100) territory amid ‘low’ volumes of chatter. 

This marks the second antitrust challenge for the semiconductor giant in just a week. On Friday, reports emerged that the European Commission is investigating Nvidia for potentially bundling its products in ways that could stifle competition. 

French regulators are also rumored to be preparing charges against the company.

Nvidia has not issued a public response to the Chinese investigation. However, analysts warn that potential penalties or operational restrictions could significantly impact the company’s global market position, particularly in China, a critical region for its business.

So far this year, Nvidia stock has outperformed the broader markets with gains of over 195%. 

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Read also: Nvidia’s Stock Slides As EU Ramps Up Anti-Trust Investigation Into AI Chip Maker: Retail Turns Bearish