Nvidia’s stock fell nearly 9% on Monday following confirmation from U.S. President Donald Trump that tariffs on imports from Canada and Mexico would take effect on Tuesday. The sharp decline erased approximately $265 billion from the company’s market value, bringing its capitalization down to $2.79 trillion from its previous $3 trillion level. The sell-off contributed to a broader market downturn, with the Dow Jones Industrial Average dropping 800 points (1.8%) and the Nasdaq Composite falling over 3%.
The drop extends Nvidia’s recent stock weakness, as shares have declined more than 13% since Wednesday, despite the company reporting strong quarterly earnings. Nvidia posted a 78% year-over-year revenue increase to $39.33 billion, surpassing analysts’ expectations. However, concerns over tariffs and regulatory risks have overshadowed its performance. During the earnings call, Nvidia Chief Financial Officer Colette Kress addressed the uncertainty surrounding tariffs, stating that the company awaited further clarification on the U.S. government’s plans.
Nvidia’s chips are primarily manufactured in Taiwan, but some of its high-end systems and assembled computers originate from Mexico and the U.S., which could be affected by the new 25% import duties. Additionally, Nvidia came under scrutiny for its exports to Singapore, which some analysts speculate could be a conduit for routing its advanced AI chips to China, potentially bypassing U.S. export restrictions. This follows reports that Singaporean authorities detained three individuals last week for allegedly misrepresenting the final destination of U.S.-manufactured servers.
Analysts weigh in on Nvidia’s stock outlook amid trade concerns
On Tuesday, Nvidia shares continued to slide, dropping as much as 3% before paring losses. The broader market remained under pressure as the Trump administration also imposed a 10% duty on Chinese imports. While semiconductors themselves are not directly targeted by the tariffs, analysts have raised concerns about the impact on data processing equipment, including AI servers utilizing Nvidia’s chips. Contract manufacturer Foxconn, which is assembling Nvidia’s Blackwell AI-powered servers in Mexico, could face higher costs, potentially reducing demand and affecting chip sales.
Amid growing concerns, Nvidia’s stock has faced additional pressure following reports that its Blackwell AI GPUs may still be reaching China despite U.S. trade controls. Media findings have renewed fears of stricter regulatory measures that could further limit Nvidia’s access to the Chinese market, which accounted for $17 billion in fiscal year 2025, or 13% of the company’s total revenue. Despite the stock’s decline, analysts maintain a positive long-term outlook. Bernstein analyst Stacy Rasgon argued that fears of Nvidia’s AI growth slowing were premature. He maintained a “Buy” rating with a price target of $185. – By EuroWire News Desk.