The market is in a bit of a weak spot right now, with fears of a trade war erupting. The market is uncertain, which is why many stocks have taken a hit over the past few days. This has caused some incredible bargains to open up, including one of the top stocks over the past two years: Nvidia (NASDAQ: NVDA).
The market has sold off Nvidia stock to ridiculous levels, and when the market comes to its senses, this stock could easily come roaring back. As a result, I think investors need to take every opportunity during this sell-off to load up on Nvidia shares, as the price is almost too good to be true at this point.
Nvidia makes graphics processing units (GPUs) and the infrastructure to support their usage, like its CUDA software. GPUs have become vital in today’s world because of their ability to compute in parallel. Plus, these GPUs can be connected in clusters to further amplify their computing power, making them a go-to choice when tackling tasks requiring a huge amount of computing power.
Artificial intelligence (AI) has been the biggest user of GPUs to date, and the demand for Nvidia’s GPUs has been insatiable. Many of the big tech companies have announced record capital expenditure spending for 2025, and a large chunk of that will go to Nvidia. All of them see the industry increasing its AI use, so they are loading up on GPUs, which benefits Nvidia.
This would point to another year of strong growth for Nvidia, but some investors are worried that tariffs could throw Nvidia off of its trajectory. When Nvidia’s management was asked about what the effect of a tariff would be, they weren’t sure because they didn’t know exactly what the U.S. government was planning.
Most of Nvidia’s components come from Taiwan, which seems to have sidestepped tariff threats after Taiwan Semiconductor Manufacturing announced multiple new facilities to be built in the U.S. ($100 billion worth), which will eventually shift Nvidia’s supply chain from Taiwan to the U.S.
While Nvidia may not be directly affected by tariffs, the prevailing fear is that tariffs will harm the economy, causing overall spending to decrease, which could cause companies to cut their discretionary spending.
However, I’d argue that Nvidia GPUs aren’t really discretionary spending. Increasing AI computing power (or cloud computing capacity) is basically table stakes for operating in tech right now. While observers will need to see how this thesis plays out, I think these fears and how they affect Nvidia are way overblown. After all, Nvidia issued incredibly strong guidance for the first quarter despite knowing that tariffs were coming in some fashion.
Story Continues
