Nvidia Faces Short Seller Attack Over China Trade Claims

Culper Research Announces Short Position on Nvidia

Culper Research has initiated a short position on Nvidia Corp, alleging the company continues to generate significant revenue from China, contradicting its statements about ceasing business due to US trade restrictions.

Overview of Allegations

The short seller claims Nvidia circumvents US sanctions by using Southeast Asian intermediaries, specifically Megaspeed. Culper's report suggests Megaspeed is secretly financed by Alibaba through shell companies to facilitate the diversion of GPUs into China. Trade records allegedly show a Megaspeed subsidiary imported $4.6 billion in products, with $4.0 billion from an Nvidia OEM partner with ties to the Chinese state. Culper states over 20% of Nvidia's fiscal 2026 compute revenues still come from China.

Economic and Market Implications

Based on these findings, Culper Research is shorting Nvidia stock, anticipating a decline in its share price. The firm also notes that recent Chinese policies favoring domestic alternatives are likely causing Nvidia's actual China business to decline, suggesting a potential future headwind for the chipmaker's revenue.

Summary

Culper Research's report raises serious allegations about Nvidia's compliance with US trade sanctions, creating uncertainty around the stock. The market will be watching for Nvidia's response and any potential regulatory investigations.

FAQ

Q: Why did Culper Research short Nvidia?
A: Culper alleges Nvidia is violating US trade restrictions by continuing to sell to China through intermediaries, and it expects the stock price to fall as this information becomes public.

Q: Which companies are allegedly involved with Nvidia?
A: The report names Megaspeed as the primary intermediary, allegedly financed by Alibaba to divert Nvidia products into China.

Source: Investing.com