Nvidia (NVDA): Antitrust charges loom over this chipmaker

Integrated circuit manufacturer Nvidia (NASDAQ:NVDA) may be accused of violating antitrust laws by French regulatory authorities, Reuters Agency reported. This comes after the French competition agency conducted a search of the offices of a leading GPU company. Although the French body did not officially reveal the identity of the company, sources confirmed that Nvidia was at the center of the investigation.

Regulatory context

The raid was part of a broader investigation into the cloud computing sector, with French authorities concerned that large companies could use their resources to harm smaller players.

Nvidia’s AI chips are in high demand, which is drawing the attention of regulators. The French antitrust watchdog is concerned about the sector’s dependence on Nvidia’s chips. The regulator is also concerned about Nvidia’s investments in AI-focused cloud companies like CoreWeave.

It is worth noting that Nvidia is diversifying its offering and strengthening its leadership position in artificial intelligence technologies through investments and acquisitions.

Potential implications for NVDA

If found guilty of violating French antitrust laws, authorities could fine NVDA up to 10% of its global annual revenue. However, it is possible to negotiate with the antitrust authority and avoid such penalties.

It remains to be seen how this situation will develop. In the meantime, let’s take a look at NVDA’s risk profile.

Nvidia Risk Analysis

Nvidia has managed its legal and regulatory risks well. In a regulatory filing, the company said compliance with laws and regulations did not materially impact its capital expenditures or competitive position.

As Nvidia successfully navigates the changing regulatory and legal landscape, TipRanks Risk Analysis Tool shows that its exposure to legal and regulatory risk is lower than the industry average. Legal and regulatory risk accounts for 16.7% of its total risk, which is lower than the industry average of 20.3%.

With that in mind, let’s take a look at the Street’s recommendations for NVDA.

Are Nvidia shares worth buying, selling or holding?

Wall Street analysts are bullish on Nvidia stock. The stock has 38 Buy ratings and three Hold ratings, giving it a Strong Buy consensus. The analysts’ price target for NVDA stock is $135.81, which implies a 9.26% upside potential from current levels. NVDA stock is up about 151% since the beginning of the year, outperforming the S&P 500 (SPX) over 14% profit.

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