US Probes Alleged Smuggling of $160M Export-Controlled Nvidia Chips to China
US authorities are investigating an alleged network that smuggled $160 million of export-controlled Nvidia chips into China. The probe, detailed by CNBC's Eamon Javers on 'The Exchange,' updates on government efforts to enforce export restrictions on high-performance AI hardware.
1. IFM Investors Slightly Trims NVIDIA Position
In the third quarter, IFM Investors Pty Ltd reduced its NVIDIA holdings by 0.1%, selling 3,100 shares and ending the period with 4.79 million shares, representing 7.5% of the firm’s total assets under management. Despite the minor reduction, NVIDIA remains IFM’s largest single equity position, valued at approximately $853 million at quarter end. This modest shift suggests continued confidence among institutional investors even as portfolio managers rebalance exposure amid a broader technology rally.
2. Q3 Earnings Deliver Strong Beat on Both Top and Bottom Lines
NVIDIA reported third-quarter results showing $57.0 billion in revenue, up 62.5% year-over-year, driven primarily by data-center sales of its Hopper-architecture GPUs. Earnings per share of $1.30 exceeded consensus estimates by $0.07, while net margin expanded to 53.0% and return on equity reached 99.2%. Despite ongoing supply constraints and export restrictions, management reiterated guidance for continued double-digit growth in AI-related segments, underscoring resilience in demand for accelerated computing products.
3. Federal Probe of Alleged Smuggling of Export-Controlled Chips into China
U.S. authorities have launched an investigation into a network accused of illegally exporting approximately $160 million worth of NVIDIA’s high-end AI chips to China. According to court filings, intermediaries purchased devices through domestic resellers, falsified end-user certificates, and rerouted shipments to end users in mainland China. The probe, led by the Department of Justice and Commerce’s Bureau of Industry and Security, underscores heightened enforcement of export controls on leading-edge semiconductors amid national security concerns.
4. Wall Street Maintains Overwhelming Buy Consensus
Among 54 research analysts covering NVIDIA, 51 recommend Buy or Strong Buy, four issue Hold ratings and one Give Sell. The consensus price target implies mid-teens upside from current levels. Recent upgrades include Melius Research moving its objective from $300 to $320 per share and Truist Financial reaffirming its bullish stance. Analysts cite NVIDIA’s dominant data-center franchise, accelerating AI infrastructure demand, and robust long-term margin prospects as key drivers supporting the high conviction among institutional and retail investors alike.