Nvidia stock consolidates at $177 after China cites antitrust breach in Mellanox deal

Traders Union
All News
Financial News
Nvidia stock consolidates

Highlights

- Nvidia stock fell 0.3% to $177.31 after China deepened its antitrust probe into the Mellanox deal.

- Technical support sits around $175, with resistance near $185 and risk of a drop toward $160 if pressure escalates.

- A rebound to $190–$200 remains possible if penalties are minor and export restrictions stabilize.

On the technical front, Nvidia remains in a longer-term uptrend, supported by consistent institutional demand for AI-related equities. However, on the daily chart, the stock appears to be entering a short-term consolidation phase, shaped by regulatory uncertainty and broader sector rotation. The immediate support zone lies between $170 and $175—a region where NVDA has historically attracted dip buyers. A break below this zone could trigger further downside toward the $160–$165 area, where the 50-day moving average could offer additional technical support.

On the upside, resistance is expected between $180 and $185, near the recent high and psychological thresholds. Nvidia would need to break above this ceiling with convincing volume and positive macro headlines to resume its upward momentum. Should the broader semiconductor sector stabilize and news from China cool down, a retest of the $190–$200 range becomes viable.

Nvidia stock price dynamics (July 2025 - September 2025). Source: TradingView

Despite the current pullback, technical momentum indicators such as RSI and MACD are not yet signaling deep oversold conditions. This suggests that the sell-off remains orderly rather than panic-driven, but the risk of a sharper correction remains if negative catalysts continue to emerge. Volume patterns also indicate that selling pressure is not accelerating aggressively, pointing to a cautious, rather than fearful, market stance. However, a breach below the $170 support zone on strong volume could quickly shift sentiment and trigger algorithmic selling.

China’s antitrust probe raises strategic risk for Nvidia’s Asia footprint

The recent downturn in Nvidia’s share price is directly tied to breaking news from China’s State Administration for Market Regulation (SAMR), which has expanded an antitrust probe into Nvidia’s 2020 acquisition of Mellanox Technologies. Chinese regulators assert that Nvidia failed to comply with anti-monopoly conditions tied to that transaction, and a preliminary investigation has found signs of non-compliance.

The consequences of this investigation could be severe. China has the authority to impose heavy financial penalties, restrict product sales within the country, or even limit Nvidia’s strategic partnerships with Chinese data center and cloud providers. Importantly, this comes at a time when U.S. export controls are already pressuring Nvidia’s ability to ship high-end AI chips, such as the A100 and H100, to Chinese customers. The company had created a modified H20 chip to work around U.S. restrictions, but even those sales now face hurdles due to licensing and regulatory delays.

Geopolitically, this move by China can be interpreted as part of the broader technology decoupling between the U.S. and China. Beijing’s decision to escalate the probe may also be a strategic bargaining tool, potentially signaling that tech cooperation will remain conditional on Chinese regulatory approval. The timing is especially critical, with the U.S. recently doubling down on semiconductor export bans and Chinese companies like Huawei pushing aggressively into the AI chip market.

Price outlook tilts bearish with downside risk to $165

Given the regulatory overhang from China, Nvidia’s short-term price outlook has tilted mildly bearish. The most probable base case is a continuation of sideways consolidation within a $165–$185 range, with the $175 level serving as a key pivot. If the regulatory headlines intensify or lead to concrete sanctions, Nvidia could decline to retest the $160–$165 range, especially if compounded by negative sentiment across the broader chip sector.

In a more constructive scenario, where China opts for dialogue or issues only minor penalties, Nvidia could stage a rebound back toward the $190–$200 level. However, this would likely require confirmation that export restrictions are not tightening further and that Q3 earnings guidance remains intact. Investor sentiment would also need to improve, particularly around U.S.–China tech relations and clarity on future regulatory risks.

Billionaire investors Philippe Laffont of Coatue Management and Chase Coleman of Tiger Global have sharply increased their Nvidia stakes, signaling strong conviction in the AI supercycle. Their moves highlight a broader hedge fund shift toward companies dominating AI infrastructure, reinforcing Nvidia’s role as a core asset in the semiconductor race.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.