By Trefis Team
Publication Date: 2026-02-19 14:30:00
Nvidia (NVDA) has had its share of setbacks. The stock has dropped more than 30% over a period of less than two months on up to eight different occasions in recent years, erasing billions in market capitalization and eliminating substantial gains in a single correction. If past events are any indication, NVDA stock is not shielded from abrupt, sharp downturns.
Nvidia is losing more than 4% of its market value in Suqian, Jiangsu Province, China, on February 21, 2024. (Photo Illustration by Costfoto/NurPhoto via Getty Images)
NurPhoto via Getty Images
In particular, we highlight these risks:
- China Antitrust and Regulatory Entrapment
- Accelerating Competitive Encroachment
- Deteriorating Quality of Earnings
Risk 1: China Antitrust And Regulatory Entrapment
- Details: Mandated remedies or penalties from antitrust verdicts, affecting gross margin, Valuation de-rate stemming from a permanent loss of China market share
- Segment Affected: Data Center
- Potential Timeline: Immediate to Q2 2026
- Evidence: China’s regulator determined NVDA breached antitrust regulations in the Mellanox acquisition (Sept 2025), New regulations reportedly require Chinese purchasers to buy domestic chips for each H200 imported (Jan 2026), Reopened access to China’s market is accompanied by a new 25% revenue-sharing tariff (Jan 2026)
Risk 2: Accelerating Competitive Encroachment
- Details: Decline in average selling price (ASP) due to direct price competition with AMD’s MI-series, Loss of market share in crucial emerging…