Nvidia stock fell Monday along with shares of other U.S.-based chipmakers as China stepped up political pressure on the U.S.
On Monday, China's State Administration for Market Regulation said a preliminary investigation found that Nvidia's 2020 acquisition of Mellanox Technologies violated antitrust laws. The regulator said certain conditions imposed when China initially approved the deal were not met.
Nvidia responded to the news by saying it will cooperate with all relevant agencies, according to Seeking Alpha. "We comply with the law in all respects," an Nvidia spokesperson said.
On Saturday, the Ministry of Commerce in China announced two investigations of the U.S. semiconductor industry. The news came after the Trump administration expanded its restricted trade list by adding 23 Chinese firms.
One investigation involves allegations that the U.S. dumped certain analog chips in China in a predatory pricing move. Shares of Analog Devices, Texas Instruments and other U.S. analog chipmakers fell on the news.
"We view these investigations/decisions as negotiating points China can attempt to use in its talks with the U.S., but are less certain as to whether any of these new items will have meaningful impact on U.S. vendors or trade," Wedbush Securities analyst Matt Bryson said in a client note Monday.
Mizuho Securities trading-desk analyst Jordan Klein called the China actions "total noise and pure posturing" by the China government to gain leverage over the U.S. in current trade negotiations.
Nvidia Stock Is On Four IBD Lists
In a report Monday, Bernstein Research said China's moves show escalating geopolitical tensions. The actions could result in tariffs on U.S. chips in China that could spur demand for domestic alternatives, Bernstein analysts said.
For instance, China has been leaning on Huawei to produce AI processors that could substitute for those from Nvidia and AMD.
On the stock market today, Nvidia stock slid a fraction to close at 177.75.
Nvidia stock is on four IBD lists: IBD 50, Sector Leaders, Stock Spotlight and Tech Leaders.
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