Semiconductor stalwart Nvidia (NASDAQ:NVDA) incurred muted trading activity on Monday afternoon amid recent antitrust charges. According to a Reuters report, inside sources claim that French regulators are on the cusp of issuing anti-competitive charges against the company. While NVDA stock has undoubtedly been the toast of Wall Street, some concerns are rising to the forefront.
Interestingly, the regulators’ objections follow a raid in the French graphics cards sector in September last year. Inside sources stated that this action specifically targeted Nvidia, though authorities denied such targeting. On paper, the raids represented a component of a wider inquiry into cloud computing.
Reuters notes that the French regulatory agency “publishes some but not all its statements of objections to companies.” Nvidia itself declined to comment on the matter.
NVDA stock is no stranger to the spotlight. Since the beginning of this year, shares gained about 157%. In the past 52 weeks, the equity has almost tripled in value. Still, blistering success often comes with greater scrutiny. As Reuters pointed out, although NVDA shot higher due to its relevance to artificial intelligence, the company’s rising dominance in the tech ecosystem has attracted inquiries on both sides of the Atlantic.
NVDA Stock Faces a Regulatory Body Looking for a Fight
What’s especially noteworthy about the latest hit against NVDA stock is that French authorities have not been acquiescent to Big Tech enterprises. On the contrary, they’ve come out swinging. In September last year, France suspended sales of the Apple (NASDAQ:AAPL) iPhone 12 and also threatened a recall. At the time, regulators found that the smartphone emitted radiation levels exceeding a defined limit. Apple responded with a software update for the French market.
Another significant component to this narrative is that Nvidia revealed last year that regulators in the European Union, China and France had inquired about its graphics processors. For the moment, per Reuters, the European Commission is unlikely to increase the scope of its preliminary review due to France investigating NVDA. Still, that might not necessarily be an encouraging sign for NVDA stock.
In November, French Finance Minister Bruno Le Maire pointed the finger at the tech juggernaut, claiming that its dominance was causing “growing inequalities” between countries. In addition, Nvidia’s massive footprint has stifled fair competition. He also noted that 92% of graphics processors stem from Nvidia.
France is also concerned that Nvidia is making growing investments in the broader artificial intelligence (AI) space, thus potentially driving out competitors. Heaping pressure against NVDA stock, the U.S. Department of Justice is also investigating Nvidia, according to another Reuters report.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor held a LONG position in NVDA.
