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Nvidia Faces $5.5 Billion Earnings Hit as U.S. Tariffs and Export Controls Bite

The semiconductor giant's stock has dropped 20% this year, reflecting mounting pressures from trade policies, supply chain vulnerabilities, and geopolitical tensions.

Nvidia chief executive Jensen Huang.
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Overview

  • Nvidia disclosed it expects a $5.5 billion earnings hit due to new U.S. tariffs and export restrictions, particularly affecting its Chinese market operations.
  • The company's stock has fallen 20% year-to-date, significantly underperforming the broader Nasdaq 100, which is down 12% in 2025.
  • Analysts highlight Nvidia's dependence on overseas manufacturing, especially in Taiwan, as a major vulnerability in the face of U.S.-China trade tensions.
  • Nvidia's meteoric growth following AI advancements like ChatGPT has led to unsustainable market expectations, now being recalibrated by investors.
  • Geopolitical risks, including potential disruptions in Taiwan's chip production, exacerbate concerns about Nvidia's long-term growth and stability.