In today's video, I discuss Nvidia (NVDA -3.01%), the semiconductor company that designs AI chips powering the tech revolution. I'll explore its record-breaking quarter, market dominance in AI processors, and the potential impacts of tariff threats.
The Trump administration is proceeding with tariffs as part of its trade policy, though the situation has evolved dramatically since the initial announcement on April 2. It has injected uncertainty into the stock market, resulting in one of the most volatile weeks in recent memory.
As the U.S. has stepped up chip-export restrictions, Nvidia has maintained a China presence by making versions of its powerful processors that qualify for sale there.
Stocks closed mostly lowered on the holiday-shortened week, though small caps muscled a win with the RUT rallying more than 1%. Nvidia (NVDA) was behind a lot of the downside action as it faced multiple headwinds that plunged its stock more than 8%.
Despite new China export restrictions, NVIDIA remains bullish due to other positive factors.
NVIDIA Corporation NVDA and Advanced Micro Devices, Inc. AMD are at the center of the artificial intelligence (AI) hardware boom. Both companies make the graphics processing units (GPUs) and AI accelerators that train large language models, power cloud servers and drive modern computing.
New U.S. export restrictions aimed at China have hit tech stocks and major semiconductor companies. Nvidia expects a $5.5 billion revenue loss, contributing to a steep decline Wednesday. Boeing also suffered as China halted new aircraft deliveries, while United Airlines reported record earnings for Q1 but cited the economy as "impossible to predict” in its dual-profit scenarios. While the full effect of tariffs remains contested, tariffs could be used as a bargaining chip to ease the regulatory environment for some U.S. companies.
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Tony Wang, T. Rowe Price portfolio manager, joins 'Squawk Box' to discuss the state of the tech sector, Nvidia CEO Jensen Huang's trip to Beijing, state of the AI technology race, and more.
President Trump's trade policies are reshaping global manufacturing. Nvidia's $500 billion investment in U.S. AI infrastructure, aided by TSMC and other chip companies, reduces Taiwan and China risks for TSM. TSMC faces risks from geopolitical tensions and competition, but remains a quality company to DCA into, avoiding big moves before earnings.
The trade war with China has been rough on Nvidia Corp. (NASDAQ: NVDA) shares, which recently hit a year-to-date low below $87 apiece.