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2:28 PM · 9 December 2024

Nvidia loses 2.3% in pre-market amid anti-trust China probe

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The biggest company on Wall Street, Nvidia (NVDA.US) shares are losing almost 2.3% in pre-market trading, as China Central Televison reported that China's State Administration for Market Regulation (SAMR) probe the company with antitrust lawsuit, related to its monopoly on AI chips market. During Q3 2024 (fiscal Q3 2025), Nvidia had almost 15% revenues from Chinese market.

Now, investors may expect, that China will try to replace Nvidia's Chinese market share with other, mostly local companies products and further semiconductors' development. AI technologies are pivotal for a numerous high-tech sector such as autonomous driving, data analysis, financial modelling, or Chinese smart city programme. Investors may fear that other US-based companies may also face the same pressures, from China. However, the specifics of the investigation as for now remain undisclosed.

 

Source: xStation5

Nvidia is valued with significant premium vs Nasdaq, with P/E forward at 33 (almosg 50% higher than benchmark stocks) and P/E at 56, signalling that lower revenue growth dynamics and earnings expansion may lead to repricing.

Source: XTB Research, Bloomberg Finance L.P.Source: XTB Research, Bloomberg Finance L.P.

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