Stocks Analysis by MarketBeat.com (Thomas Hughes) covering: NVIDIA Corporation, Advanced Micro Devices Inc, Mellanox Technologies Ltd. Read MarketBeat.com (Thomas Hughes)'s latest article on Investing.com
stock price dived after reports that China is investigating it for violations of its anti-monopoly laws. The move could impact NVIDIA’s business; China accounts for about 15% of the annual revenue, but how far is China willing to go? NVIDIA’s chips and CUDA framework are essential to harnessing AI power today; China’s investigation is more likely a warning than a real threat.
NVIDIA announced plans to acquire the company in 2019 and closed the deal in 2020 for a valuation of $6.9 billion. Today, Mellanox is part of NVIDIA’s networking business, which includes high-speed ethernet and Infiniband solutions. China is upset because NVIDIA didn’t disclose Mellanox product information within a 90-day window intended to prevent a monopoly.
Is it hard for NVIDIA semiconductor rivals to compete? Yes, it is. They are years behind the curve in developing similar technology and support infrastructure and demand for these products is enormous. The question is whether NVIDIA has market share to lose, and the answer is yes. What do the analysts think about China’s probe? Not much, at least not enough for any revisions to appear soon after the release. The news surely raises some questions, but the takeaway is that the revenue and earnings growth outlook is unchanged. As it is, the consensus reported by MarketBeat forecasts another 50% growth in 2025, sufficient to put revenue growth near 6500% since 2020 when the AI boom was getting started.
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