Wall Street is wondering how potential import tariffs under the Trump administration will affect artificial intelligence darling Nvidia and the broader industry. The president-elect, who was successful in defeating Vice President Kamala Harris in his re-election campaign, has touted import tariffs and the CHIPS Act, which was enacted under President Joe Biden and aimed at encouraging semiconductor manufacturers to manufacture in the United States. Earlier this year, President Trump accused Taiwan of stealing chips. He said he would shut down semiconductor manufacturing operations from the United States and impose tariffs as president. Many US-based companies rely heavily on Taiwan-based suppliers, such as Taiwan Semiconductor Manufacturing, for key components used to build AI tools. Tariffs could increase the cost of goods throughout the supply chain. “There may be some challenges as we head into early 2025, but the industry’s initial view is that NVIDIA is the golden child of AI and that President Trump has no plans to damage those associated with the godfather of AI. (NVIDIA CEO Jensen Huang),” said Dan Ives, an analyst at Wedbush Securities. However, many investors expect the company to overcome these concerns, given its high profit margins, primarily U.S.-based customers, and the position of its successor. The stock has so far succeeded in dispelling those concerns, rising 9% since the beginning of the week. NVDA 5D Mountain Last Week’s Share If the administration implements tariffs, Ives believes NVDA could get some workaround given its essential status. This could take the form of excluding some of the company’s next AI chips and graphics processing units from the expected wave of tariffs in spring 2025. “Imposing tariffs means that Nvidia’s relative position relative to its competitors is poor.” In reality, not much has changed,” said Hua Chen, a portfolio manager at Mirova. “Nvidia’s competitive advantage would be about the same in that case.” Many investors also see Trump as a champion of AI innovation. That’s partly due to his close relationship with Tesla CEO Elon Musk, and Ives said this week that some investors are dispelling concerns about supply chain disruption caused by tariffs. He said it may have been helpful. Bank of America’s trading desk also said in a recent note to clients that as Tesla develops AI tools for xAI, Musk is “avid users, buyers, and He emphasized that he was a fan. “The election won’t change anything here,” Mizuho’s Jordan Klein wrote. “As NVDA’s new high-speed Blackwell systems are rolled out, spending will accelerate significantly and more cloud capital investment will move into this space. It’s like trying to host a Formula 1 race on a dirt track. ”
