How One Short Seller Nailed the Top on Nvidia Stock

Back in May, activist firm Culper Research bet against Nvidia by predicting the company was finding ways around US export controls. While CEO Jensen Huang publicly stated that sales to China were zero, the short seller suspected chips were flowing through Taiwan, Malaysia, and Singapore. As it turned out, that suspicion was spot on and marked the exact top for the stock price.

Recent events have validated those early warnings. Taiwanese prosecutors recently searched the home and workplace of an Nvidia employee suspected of smuggling restricted chips to China. Around the same time, Jensen Huang met with the US Commerce Secretary in Washington, bringing these hidden supply chain issues into the mainstream spotlight.

Culper Research originally flagged specific intermediaries like Singapore's Megaspeed and Taiwan's Giga Computing, calling them just the tip of the iceberg. With regulatory scrutiny heating up and legal investigations expanding in Asia, traders need to watch how these compliance issues affect the broader tech and AI hardware sector going forward.

This situation serves as a sharp reminder that regulatory pressure can catch up to even the biggest market darlings. Keep a close eye on trade policy updates and any further developments in Asian chip distribution channels.