Nvidia was falling following President Donald Trump’s imposition of sweeping tariffs on imports to the U.S. The chip maker escaped specific levies but the wider market reaction and a rare downgrade from a Wall Street analyst looked to be dragging on the shares.
Nvidia shares were down 7.2% at $102.47 in morning trading on Thursday. The stock rose 0.3% during Wednesday’s session.
The tariff announcement wasn’t quite as bad as it could have been for Nvidia. Trump said the levy on imports for Taiwan—where Nvidia’s chips are mostly manufactured—will be set at 32%. However, the White House published a fact sheet after Trump’s announcement that said semiconductors would not be subject to that tariff.
That doesn’t mean chip tariffs are off the table entirely. Products such as semiconductors, pharmaceuticals and lumber will be addressed separately, a senior administration official said.
The other major concern is likely to be potential retaliation from Beijing, with Chinese goods now facing total duties of 54% after the latest tariff announcements. Meanwhile, the Trump administration still hasn’t yet made clear how it intends to apply former President Joe Biden’s so-called AI diffusion rules to control chip exports before they take effect on May 15.
“The hope among some investors was that this would serve as a “clearing event”, but we think the outcome was generally worse than expected and ambiguity is still high. We also struggle to see how semis stocks really work again in earnest until we get clarity on AI Diffusion Rules,” wrote UBS analyst Timothy Arcuri in a research note.
Tariffs aren’t the only concern that have been weighing on Nvidia’s shares. The market has also been watching for signs that its ability to keep raising prices is waning. HSBC analyst Frank Lee thinks that point has arrived with its latest B300 and GB300 Blackwell hardware, noting there has been no significant uplift in average selling price from the B200 and GB200.
Lee changed his rating on Nvidia to Hold from Buy and lowered his target for the stock price to $120 from $175.
“Increasing mismatches and inconsistencies in Nvidia’s supply chain continue to grow and hence we believe it would be difficult for our bull case scenario, which suggests earnings upside potential, to materialize,” Lee wrote. “We believe robotics and autonomous auto… will be the next catalysts to drive earnings upside or re-rating again, but the market needs to see more revenue attribution emerge,”
Meanwhile, Nvidia on Wednesday said its Blackwell computing platform set performance records in tests for inferencing—the process of generating output from AI models—carried out by MLCommons, an open engineering consortium.
There has been speculation over whether Nvidia’s dominant position in AI chips would weaken as the focus shifts from training AI models to inference. The company has pushed back hard against that, noting inference makes up around 40% of its data-center revenue and is growing fast. It says that its NVL72 server system delivers a fourfold improvement in AI model training but up to a 30 times improvement in inference compared with previous systems.
Among other chip makers, Advanced Micro Devices fell 4.6% in morning trading. Broadcom was down 6.9%.