The Trump Trade: How Tariffs and AI Demand Fears Are Shaping Nvidia’s Future

The Trump administration’s renewed tariff actions have sent shockwaves through global markets, with the technology and semiconductor sectors particularly exposed. Nvidia (NVDA) is closely tied to the ongoing expansion of cloud computing and AI technologies.

The imposition of new tariffs has put heavy pressure on Nvidia in 2025, causing its stock price to plunge over 30% year to date. Meanwhile, as tariff fears and uncertainty over AI infrastructure spending grow, investors question whether Nvidia can regain its momentum and reclaim a $3 trillion valuation.

The Tariff Effect and Its Broader Impact on Nvidia

Direct Hit – $5.5 Billion Charge from China Sales

Trump’s tariff policies have directly impacted Nvidia’s bottom line. The US government placed indefinite restrictions on Nvidia’s H20 chips, designed specifically for China.

As a result, Nvidia recorded a $5.5 billion charge, reflecting the loss of a critical market.

However, China accounted for only 13% of Nvidia’s fiscal 2025 revenue; losing this segment opens opportunities for domestic Chinese competitors.

Indirect Pressure – Cloud Giants Slow AI Infrastructure Spending

The impact of tariffs extends beyond direct sales losses. Cloud infrastructure providers like Amazon Web Services (AWS) and Microsoft (MSFT) have reportedly delayed data centre expansion.

AWS postponed new leases, and Microsoft has similarly scaled back aggressive capital spending plans.

These moves raised concerns over Nvidia’s near-term GPU sales, given that cloud players drive much of the demand for AI infrastructure.

Key Earnings Dates – The Crucial Test for Nvidia Investors

Amazon will report its Q1 2025 earnings on May 1, while Microsoft reports on April 30. These updates are critical. If these companies confirm that capital spending remains intact, Nvidia’s stock could rebound sharply. AWS leadership has described the changes as “routine capacity management,” suggesting no significant long-term cuts are planned. Investors must watch these earnings closely to gauge the accurate demand trajectory for Nvidia’s products.

Why Nvidia’s Forward P/E Ratio Now Signals Opportunity

The chart below shows Nvidia’s and its competitors’ forward price-to-earnings (P/E) ratios. Currently, Nvidia’s forward P/E ratio stands at 25.14, which is very close to AMD at 21.90 and Broadcom (AVGO) at 28.99. Meanwhile, Intel’s forward P/E ratio is much higher at 63.77, reflecting greater perceived risk.

For Nvidia, its valuation premium has significantly compressed compared to its peers. In early 2024, Nvidia was trading at a much higher valuation multiple relative to others. After the tariff concerns and fears of AI demand, Nvidia’s valuation has normalised closer to industry averages. This suggests that Nvidia is no longer highly overvalued compared to its semiconductor competitors. Therefore, the correction in Nvidia’s stock price during the trade crisis offers a potential buying opportunity for long-term investors.

Technical Analysis: Nvidia’s Long-Term Bullish Structure Remains Intact

The Nvidia monthly chart shows a long-term strong uptrend followed by recent heavy volatility. After forming a strong bullish hammer near $10.80 in late 2022, the stock surged aggressively on strong AI demand. It peaked at $152.87 before entering a sharp correction. Recent bars show heavy volatility, reflecting market uncertainty. In April 2025, Nvidia is attempting a reversal near the $90.67 low. The chart suggests that if April 2025 closes above $115, it could begin a new recovery phase.

Nvidia’s weekly chart also supports the bullish outlook. The weekly chart shows a long-term bullish trend within an ascending broadening wedge. The stock respected long-term support levels multiple times during pullbacks. After breaking out above $186, Nvidia accelerated sharply to new highs.

Recently, the stock entered a phase of price compression between $153.12 and $86.62, forming a tight range. This compression signals indecision and a potential breakout setup. The long-term bullish trend remains intact as long as Nvidia maintains a broadening wedge structure.

Based on the above price structure, the price remains within a strong bullish trend, and the sharp correction following tariff concerns is creating a new buying opportunity for traders and investors.