TECH NEWS – Trump’s tariffs will cut into Nvidia’s profits, so there’s no such thing as a “minimal tariff” situation.

Just a few days ago, the stock market was celebrating the fact that Nvidia would not be much affected by the tariffs. Lynx Equity was so optimistic that May would see a return to record earnings for the company’s stock. Except that the Trump administration has now upended a major source of revenue for the GPU giant, so there is little chance of that happening, and it was a relief to the markets in vain when Trump relaxed the 10% global import tariffs for all U.S. trading partners (except China).

Trump then temporarily lifted tariffs on imports of chips and electronics from China (such as Apple’s iPhones), reducing the effective tariff on all Chinese imports from 145% to 104%. Yes, but imports of chips, smartphones, and other electronics from China are currently still subject to the 20% tariff on fentanyl. But this may be the end of a good time for consumers…

Nvidia has announced that it expects to take a charge of up to $5.5 billion in its fiscal quarter due to inventory, purchase commitments and related provisions related to the China-specific H20 GPU. The H20 is a limited version of the H100 intended for China, but on April 9, Trump et al told the Jensen Huang-led company that the H20 will be subject to an indefinite export license requirement going forward, and that this restriction will apply to other ICs with similar memory and interconnect bandwidth.

Nevertheless, Lynx Equity continues to argue that by sourcing most of the components for its AI servers from outside the U.S. and assembling them by Taiwan-based system integrators, Nvidia has built a multi-layered strategy to almost completely evade U.S. tariffs. But Beijing will almost certainly respond in some way, and with nothing left to lose, it is only a matter of time.

Source: WCCFTech, SEC