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Nvidia (NASDAQ:NVDA) stock is actually flat over the month, which leads us back to Liberation Day on 2 April. This was the day on which US President Donald Trump announced his global tariff policy with the aim of addressing strategic trade imbalances. And while the stock initially moved down, there’s been a recovery in recent weeks.
However, this doesn’t mean that £10,000 invested a month ago would be worth £10,000 today. Unfortunately for any investor who took this plunge, the pound has appreciated against the dollar. Thus, a £10,000 investment would be roughly worth around £9,800 today.
What’s going on at Nvidia?
April saw Nvidia’s share price swing sharply, primarily due to escalating trade tensions and tariff announcements from Donald Trump. The prospect of “reciprocal tariffs” on technology imports rattled markets, with Nvidia particularly exposed because over 90% of its chips are manufactured by Taiwan Semiconductor Manufacturing Company in Taiwan.
While Nvidia CEO Jensen Huang has attempted to reassure investors, saying tariffs would have minimal impact and pointing to plans for more US-based production, analysts remain concerned about margin pressures and potential supply chain disruptions. In the short term at least, it’s very hard to avoid its reliance on non-US manufacturing.
Further compounding the uncertainty, the US government imposed new restrictions on Nvidia’s AI chip exports to China, forcing the company to take a $5.5bn charge related to its H20 chips. This led to a 12.5% drop in the share price last week alone, and the stock is down about 28% year-to-date.
AI dominance remains
Despite these challenges, Nvidia remains a dominant force in the AI and data centre markets. And analysts are still broadly optimistic about its long-term prospects.
Nvidia’s grip on the AI chip industry is unrivalled. It controls around 70% and 95% of the market for AI accelerators, thanks to its powerful GPUs and the CUDA software ecosystem.
And this is reflected in the company’s booming data centre business, with Q4 2024 revenues hitting $35.6bn, fuelled by surging demand for generative AI and large language models such as ChatGPT. Nvidia’s recent Blackwell GPU launch has further cemented its leadership, promising even greater performance for AI workloads.
Meanwhile, the firm is also at the forefront of robotics — an area that could be the next big leap for AI — leveraging its AI hardware and software to power autonomous machines and edge computing.
However, risks remain. Competition from AMD, Intel, and hyperscalers developing in-house chips is intensifying. And any erosion of Nvidia’s software advantage could threaten its dominance, adding to the geopolitical pressures.
Despite this, investors should remain calm. At 24 times forward earnings, it’s hardly expensive. Coupled with its innovation pipeline and integration with cloud giants like Amazon, Google, and Microsoft, I think the stock may find support if it falls any further — as it did in April.
Personally, I’m considering buying more Nvidia stock, but haven’t made the move yet.
