One thing contributing to the drop is the 2024 election which brought Donald Trump back to the Oval Office. Trump’s 125% tariff on China could raise Nvidia’s prices.
Nvidia stock has fallen 30% from its November 2024 peak of $153, wiping out about $1.1 trillion from the company’s market capitalization, according to Google Finance.
One thing contributing to the drop is the results of the 2024 election which brought Donald Trump back to the Oval Office. Since April 2, his tariff policy has thrown markets into turmoil.
And despite Trump’s trumpeting of a 90-day pause on most tariffs, Nvidia could be in worse shape. That’s because tariffs are high on countries where Nvidia products are built. More specifically, Taiwan faces a 34% tariff while China’s rose yesterday to 125%.
Is the drop in Nvidia’s stock a buying opportunity. I see no reason to buy now because although orders may have soared in the current quarter in anticipation of tariffs, I expect the company’s May 2025 earnings report to feature a disappointing growth forecast as a result of tariff uncertainty.
More specifically, the uncertainty is due to the difficulty of answering precisely the following questions:
How much will tariffs on Taiwan and China increase Nvidia’s costs?
Will Nvidia pass those cost increases on to customers?
If so, will Nvidia be able to meet its growth targets for the current quarter and the year?
If Nvidia decides to hold prices constant, how much will the company’s margins decline?
In light of economic uncertainty caused by the ongoing tariff tit-for-tat, are companies cutting back on capital expenditures?
If so, how much is that reducing demand for Nvidia GPUs?
Nvidia remains bullish. In March, CEO Jensen Huang said tariffs would not cause meaningful short-term harm to the company due to the company’s agile supply chain; demand for AI would drive demand, and TSMC was building a plant in Arizona, according to Barron’s.
Nvidia declined to comment. A spokesperson referred me to a March 2025 company statement. “Tariffs will have a little impact for us short term. Long term, we’re going to have manufacturing onshore,” Huang said in the statement.What To Expect From Nvidia’s Next Earnings Report
Nvidia will report quarterly financial results next month featuring slower top-line growth and thinner margins based on the company’s forecasts when it last reported in February.
