Nvidia stock drops 6% due to tariffs and global trade war fears

From Yahoo Finance: 2025-04-03 19:03:00

President Donald Trump’s tariffs caused the stock market to drop, with the S&P 500 falling 4% and the Nasdaq Composite down 5%. Nvidia, once a winner, is now down 6%. Analysts fear a global trade war could further harm the already struggling U.S. economy.

Nvidia’s stock has plummeted 26% from its peak in January due to pressures on its Chinese market, disappointing earnings, and economic uncertainties. Despite reporting a 78% revenue surge in Q4, growth has slowed compared to previous years, especially in the data center segment.

Nvidia’s profit margins are under pressure as it struggles to meet the extraordinary demand for Blackwell. The company reported a 73.5% gross margin, lower than the previous year, due to complex and costly data center products. With tariffs looming, Nvidia’s supply chain in Asia-Pacific could face more challenges.

Analysts are skeptical about Nvidia’s future pricing ability and have downgraded the stock to Hold from Buy, with a reduced price target. HSBC sees limited potential for earnings upside until opportunities in robotics, autos, and AI markets evolve. The firm trades at $103 on April 3.

The White House has exempted semiconductors from tariffs, but retaliatory actions from other countries could impact Nvidia’s business. More than half of its revenue comes from international sales, making it vulnerable to trade disputes. Wall Street analysts are closely monitoring Nvidia’s pricing strategy and market position.

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