- Nvidia shares plunged nearly 9% after Trump confirmed tariffs on Canadian and Mexican imports.
- The company faces scrutiny over potential backdoor chip exports to China via Singapore.
- Nvidia plans to manufacture chips in the U.S. as part of a $100 billion Taiwan Semiconductor expansion.
Nvidia shares took a sharp hit on Monday, tumbling nearly 9% after President Donald Trump confirmed that tariffs on imports from Canada and Mexico would take effect on Tuesday.
The stock drop came amid a brutal day for the markets—The Dow plummeted 800 points (1.8%), while the Nasdaq Composite slid over 3%. Nvidia, which had previously soared past a $3 trillion market cap, saw its valuation shrink to $2.79 trillion after shedding $265 billion in a single session. The stock is now trading at levels last seen in September, before the U.S. presidential election.
Nvidia’s Rough Week Continues
Since Wednesday, Nvidia has dropped over 13%, despite reporting stellar earnings that exceeded analyst expectations. The company posted a whopping 78% revenue growth year-over-year, bringing in $39.33 billion.
During its earnings call, analysts pressed Nvidia executives on the potential impact of tariffs.
“Tariffs at this point, it’s an unknown until we understand further what the U.S. government’s plan is,” said Nvidia’s CFO, Colette Kress.
Though Nvidia’s chips are mostly made in Taiwan, some of its advanced systems and full computers are assembled in other regions, including Mexico and the U.S. The new 25% tariffs on Mexican and Canadian imports, set to kick in Tuesday, could directly impact those operations.
Scrutiny Over Shipments to Singapore
Adding to Nvidia’s troubles, the company came under scrutiny Monday for its exports to Singapore, a country some analysts suspect serves as a backdoor to ship chips to China and circumvent U.S. export restrictions. Late last week, Singaporean authorities detained three individuals for falsifying shipment destinations on U.S.-made servers.
Manufacturing Moves and AI Growth Prospects
Despite the turbulence, Nvidia is making moves to secure its future. The company confirmed that it will manufacture chips in the newly announced $100 billion expansion of Taiwan Semiconductor Manufacturing facilities in the U.S.—a project unveiled by Trump on Monday.
Last week, investors had been watching closely for updates on Nvidia’s AI business, which relies heavily on massive cloud companies, accounting for nearly half of the firm’s data center revenue. CEO Jensen Huang reassured investors that the company had resolved production issues with its latest AI chip, Blackwell.
“We’re going to have a good quarter next quarter,” Huang told CNBC last week. “And we’ve got a fairly good pipeline of demand for Blackwell.”
With tariffs looming and export concerns mounting, Nvidia faces a volatile road ahead. The big question now—can the AI powerhouse navigate these challenges while maintaining its dominance?
