Nvidia shares drop nearly 9 percent amid market selloff, with investors weighing AI outlook and tariffs
Nvidia shares fell nearly 9 percent on Monday following US President Donald Trump’s confirmation that tariffs on imports from Canada and Mexico would take effect on Tuesday, according to CNBC.
The decline came amid a broader market downturn. The Dow Jones Industrial Average, which includes Nvidia, dropped 800 points, or 1.8 percent, while the Nasdaq Composite fell more than 3 percent.
After the drop, Nvidia’s stock returned to levels last seen in September, before the US presidential election. The company’s market capitalization, which had previously reached $3tn, fell to $2.79tn, with $265bn erased from its valuation.
The stock has fallen more than 13 percent since Wednesday, when Nvidia reported earnings that exceeded analysts’ expectations.
The company’s revenue increased 78 percent year-over-year, reaching US$39.33bn.
During Nvidia’s earnings call, analysts questioned the company’s stance on US tariffs.
Chief Financial Officer Colette Kress stated, “Tariffs at this point, it’s an unknown until we understand further what the US government’s plan is.”
While Nvidia’s chips are primarily produced in Taiwan, some of its more complex systems and full computers are assembled in regions such as Mexico and the US.
These products could be impacted by the 25 percent tariffs on imports from Mexico and Canada that take effect Tuesday.
Beyond the tariff concerns, Nvidia also faced scrutiny on Monday over exports to Singapore. Some analysts believe Singapore serves as a transit point for Nvidia’s chips to reach China, potentially bypassing US export controls.
Late last week, Singaporean officials detained three individuals for misrepresenting the final destination of US-manufactured servers.
On Monday, Trump announced a US$100bn expansion of Taiwan Semiconductor Manufacturing facilities in the US, where Nvidia officials indicated they plan to manufacture chips.
Last week, investors focused on Nvidia’s outlook for artificial intelligence growth, particularly from major cloud providers, which contribute approximately half of the company’s data center revenue.
CEO Jensen Huang stated that Nvidia had resolved challenges with its latest chips, 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.”
