Nvidia shares dropped following US President Donald Trump's new tariff declarations, which caused a market-wide sell-off, particularly affecting tech stocks. How will this event impact the future of the company and the overall industry?
Impact of New Tariffs on Nvidia
Shares of Nvidia, along with many other tech giants, suffered due to Donald Trump's decision to introduce new tariffs. According to him, no country will receive special treatment concerning trade restrictions. The new policies coming into effect on April 2 have resulted in a sharp drop in Nvidia's stock prices by more than 4%.
Challenges for Nvidia on the International Stage
A 25% tariff on goods from Mexico and Canada directly impacts Nvidia as many of their GPU-based servers are assembled in Mexico. The company expects rising production costs and decreasing demand for its solutions. Potential trade sanctions could also affect supply from Taiwan, which constitutes a significant portion of US computer component imports.
Nvidia's Responses and Future Prospects
In response to the situation, Nvidia plans to increase production in the US. At the recent GTC conference, CEO Jensen Huang emphasized the importance of diversifying production. New TSMC factories in the US, supported by $100 billion investment capital, can help reduce Nvidia's reliance on foreign suppliers. However, the company's shares continue to face pressure in 2025.
The US tariff policy poses new challenges for Nvidia, forcing it to adapt to changing market conditions. In the short term, this may lead to increased costs and decreased demand, but the company is already acting proactively by exploring various options to stabilize production.
