The leading semiconductor company in the world, Nvidia (NASDAQ: NVDA) has been in a weird spot over the last thirty days. Nvidia stock is among the best performers of the S&P 500 — but despite the company’s outstanding Q3 FY2025 earnings call on November 20, it has become increasingly hard for the business to impress its shareholders.
Not all of this newfound skepticism is unfounded — Nvidia has been outperforming analyst expectations less and less as time goes on — but the aggressive profit-taking seen after November 20 was a surprise.
At press time, a single NVDA share was trading at $138.98 — on a year-to-date (YTD) basis, the stock is up 188.54%, although prices have slipped by 4.32% over the last 30 days.
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Just two weeks ago, NVDA stock was trading at $132 — and it was looking increasingly like prices were going to dip below $130. However, prices had rallied up to $145.14 in what seemed like the beginning of a more significant recovery. On Friday, December 6, Nvidia stock closed at $142.44.
The latest drop in price below $140 was unexpected — and it came about as a result of an announcement that China’s State Administration of Market Regulation had launched an investigation of the business for suspected violations of anti-monopoly laws.
Nvidia stock drops on accusations of monopolistic practices and antitrust violations
This latest move appears to be the latest battle in the smoldering conflict between the United States and China for control of the critical semiconductor industry.
On December 2, the U.S. Department of Commerce announced that sales of two dozen types of semiconductor manufacturing equipment to China would be restricted. Beijing retaliated with a ban on critical mineral exports to the United States affecting gallium, germanium, and antimony a day later. Concurrently with this, tensions are high as Donald Trump, who has promised to sign executive orders placing a 60% tariff on all Chinese goods, is set to be inaugurated on January 20.
So, what are Chinese regulatory bodies alleging?
The crux of the controversy is centered on Nvidia’s $6.9 billion acquisition of Israeli chip designer Mellanox Technologies in 2020, its largest acquisition to date — although Chinese state authorities have not yet expounded as to how the alleged violations occurred.
China is a critical market for Nvidia, having contributed approximately $6.89 billion in chip purchases to the company in the last quarter — roughly 15% of the semiconductor venture’s total revenue in that timeframe.
An escalation of the matter would add downward pressure to Nvidia stock prices — but with demand for the company’s latest line of chips being as robust as it is, the semiconductor company would still most likely be able to easily reroute orders, turning the affair into a short-term hiccup rather than a major, long-term disruption.
Featured image via Shutterstock
