Nvidia Stock Forecast as China Finds It Violated Antitrust Law

Nvidia stock price crashed by over 3% on Monday. That erased billions of dollars in value as the company faced new headwinds from China, the biggest semiconductor market. It plunged to $172, erasing some of the last week’s gains.

Still, the stock’s strong technicals mean that it will ultimately rebound in the near term.

Nvidia Stock Price Dips After Probe Finds It Violated Antitrust Law

The Nvidia share price dropped after the State Administration for Market Regulation said that the company violated antitrust law following its purchase of Mellanox Technology in a deal that was valued at over $7 billion.

The buyout helped combine the company’s GPU leadership with Mellanox’s high-performance networking solutions, InfiniBand, to create an end-to-end data center technology stack.

The regulator launched the probe in December last year, four years after it gave it approval to acquire Mellanox. As part of the buyout, the regulator pressed the company not to discriminate against local companies.

The announcement came after China revealed that it was investigating American semiconductor companies. Nvidia is one of the biggest among those firms.

The announcement came as the Chinese and US teams were meeting in Madrid. They aim to ink a trade deal ahead of the November deadline.

Nvidia stock price is often sensitive to developments in China. This country’s semiconductor demand has been upward for the past few years.

The Trump administration blocked Nvidia and other American companies from selling chips to China a few months ago. That move affected the company’s growth in the second quarter.

It recently allowed it to sell the H20 chips to the country, but the response from Beijing was not all that good. The officials were pressing companies against using the chips. Nvidia then paused selling these chips to the country.

Nvidia Revenue Growth to Continue Without China

Analysts believe that Nvidia’s business would do significantly better if it could sell its advanced chips to China. Companies like ByteDance and Alibaba are still interested in Nvidia’s chips.

However, there are signs that the company understands its Chinese business can face major headwinds in the future. It did not sell any chips to China in the last quarter. Besides, the management did not include its Chinese business in its estimates for the year.

According to Yahoo Finance, Wall Street analysts expect that Nvidia’s revenue growth will be 55% this quarter. It could be another 55% in the fourth quarter. If these estimates are correct, the company’s annual revenue could be about $206 billion.

Nvidia’s revenue will then slow to 32% in 2026 as some of its top clients like Microsoft, Amazon, and Meta Platforms start to pare back their investments following three years of robust capital expenditure growth.

The other notable catalyst for the NVDA stock price is that the company recently became a bargain. It has a forward price-to-earnings (GAAP) ratio of 40. That’s much lower than the five-year average of 60. Moreover, a non-GAAP multiple of 39 is also lower than the five-year average of 46.

NVDA Stock Price Technical Analysis: Megaphone Pattern Forms

The daily timeframe chart shows that the Nvidia stock price has remained in a narrow range for the past few months. Along the way, it has formed the highly bullish megaphone pattern, which is made up of two diverging trendlines.

The stock has formed a bullish flag pattern and remained above the 50-day and 100-day Exponential Moving Averages. It has also formed a bullish flag pattern, a common continuation sign.

Therefore, the most likely scenario is where NVDA stock bounces back in the coming weeks. It could also retest the all-time high of $184. A move above that level will point to more gains, potentially to the psychological level at $200.