Nvidia's shares decline as China regulator finds antitrust violation

Nvidia shares decline pre-bell after a Chinese regulator states that the company violated antitrust law. The company's net sales are primarily driven by computing and networking solutions (77.8%) and graphics processors (22.2%). The majority of net sales come from the data storage industry (78%), followed by gaming (17.1%), professional visualization (2.5%), automotive (1.8%), and other (0.6%).

Nvidia Corporation (NASDAQ: NVDA) saw its shares drop pre-market trading on Monday following a statement from China's State Administration for Market Regulation (SAMR) that the company violated anti-monopoly laws. The U.S. chipmaker was found to have breached antitrust regulations tied to its 2020 acquisition of Mellanox Technologies Ltd. China Finds Nvidia Violated Antitrust Law in Chip Deal Probe (1)^[1].

Nvidia's shares fell about 2% in pre-market trading, while US stock index futures pared gains China Finds Nvidia Violated Antitrust Law in Chip Deal Probe (1)^[1]. The surprise announcement emerged as U.S. and Chinese officials were in Madrid for a second day of negotiations over tariffs, which could shape the relationship between the world’s two largest economies China Finds Nvidia Violated Antitrust Law in Chip Deal Probe (1)^[1].

Nvidia's net sales are primarily driven by computing and networking solutions (77.8%) and graphics processors (22.2%) Nvidia Shares Decline Pre-Bell as China Regulator Says Company Violated Antitrust Law^[2]. The majority of net sales come from the data storage industry (78%), followed by gaming (17.1%), professional visualization (2.5%), automotive (1.8%), and other (0.6%) Nvidia Shares Decline Pre-Bell as China Regulator Says Company Violated Antitrust Law^[2]. The company's revenue from China accounted for 13% of its total sales in the last fiscal year, making any potential penalty significant Nvidia stock crashes by 3% as China accuses it of breaching anti-monopoly law^[3].

The preliminary investigation by SAMR suggests that Nvidia may have violated conditions imposed during the approval of the Mellanox acquisition. The investigation is still active, and Nvidia has yet to respond publicly Nvidia stock crashes by 3% as China accuses it of breaching anti-monopoly law^[3]. Under China's antitrust law, a company found guilty of anti-competitive behavior can face fines ranging from 1% to 10% of its prior year’s sales Nvidia stock crashes by 3% as China accuses it of breaching anti-monopoly law^[3].

This development comes amidst heightened tensions between the U.S. and China over chip policy, trade routes, and global supply chains. Two days before the SAMR announcement, China opened an anti-dumping investigation into U.S. chip imports, further escalating the trade dispute Nvidia stock crashes by 3% as China accuses it of breaching anti-monopoly law^[3].