Wall Street is questioning how potential tariffs on imports under a Trump administration could affect artificial intelligence darling Nvidia and the broader industry . The president-elect, whose successful reelection campaign defeated Vice President Kamala Harris, has touted tariffs on imports and attacked the CHIPS Act implemented under President Joe Biden, which aims to foster chipmaker manufacturing in the U.S. Earlier this year, Trump accused Taiwan of stealing the chipmaking business from the U.S. and said he would impose tariffs as president. Many U.S.-based companies heavily rely on the Taiwan-based suppliers such as Taiwan Semiconductor Manufacturing for key components used to build AI tools. A tariff could increase the costs of goods throughout the supply chain. “There could be some pins and needles as we get into early 2025, but the initial read from the industry is that NVIDIA is the golden child of AI, and Trump is not going to damage anything related to godfather of AI [Nvidia CEO Jensen Huang],” said Dan Ives, analyst at Wedbush Securities. However, many investors expect the company to shake off these concerns, given their high margins, predominantly U.S.-based customers and posterchild position. The stock has managed to shake off those fears thus far, rising 9% week to date. NVDA 5D mountain Shares over the last week If the administration implements tariffs, Ives believes Nvidia could gain some workaround given its integral status. That could come in the form of excluding some of its next AI chips and graphics processing units from the tariff wave expected in spring 2025. “If we are going to have the tariffs, it means that the relative position of Nvidia against its competitors doesn’t really change too much,” said Hua Cheng, portfolio manager at Mirova. “The competitive advantages of Nvidia is more or less the same in that case.” Many investors also view Trump as a proponent of AI innovation. That is due in part to his close connection to Tesla CEO Elon Musk, which Ives said may have helped some investors shake off fears of tariff-induced supply chain disruptions this week. Bank of America’s trading desk also highlighted in a recent note to clients that Musk has been a “vocal user, buyer and fan” of the companies’ chips as Tesla builds out AI tools for xAI. “[T]he election changes nothing here,” wrote Mizuho’s Jordan Klein. “Spending will accelerate big time and more cloud capex move into this sector as NVDA’s new higher speed Blackwell system ramps. It would be like trying to host a Formula 1 race on a dirt track.”
