Nvidia Shares Plummet Amid Tariff Fears and Market Volatility

LAS VEGAS, Nevada — Nvidia Corporation’s stock price dropped nearly 9% on Monday in response to President Donald Trump‘s announcement that tariffs on imports from Canada and Mexico will begin on Tuesday.

The decline came on a particularly turbulent day for the financial markets, with the Dow Jones Industrial Average tumbling 800 points, or 1.8%, while the Nasdaq Composite fell more than 3%. Following the decline, Nvidia’s shares traded at the same levels as they did in September, prior to the U.S. presidential election, shedding approximately $265 billion off its valuation to settle at $2.79 trillion.

This drop represents more than a 13% decrease since Wednesday, when Nvidia reported quarterly earnings that surpassed analysts’ expectations, showing a 78% year-over-year revenue increase to $39.33 billion. In a statement regarding the tariffs, Nvidia Chief Financial Officer Colette Kress told investors, “Tariffs at this point, it’s an unknown until we understand further what the U.S. government’s plan is.”

Nvidia’s products are primarily manufactured in Taiwan, but certain systems and computers are assembled in the U.S. and Mexico, which will now face a 25% import duty under the new tariffs. This has created uncertainty about the financial impact on the company as it prepares for its upcoming quarter.

Additionally, Nvidia faces scrutiny regarding its export practices. Last week, Singapore detained three individuals for misrepresenting the destination of U.S.-made servers, a situation some analysts believe is related to Nvidia’s operations aimed at circumventing U.S. export controls to China.

In a bid to maintain robust supply chains, Nvidia plans to produce chips as part of a $100 billion expansion of its Taiwanese manufacturing facilities in the U.S. During a recent earnings report, CEO Jensen Huang exuded confidence about the company’s future, stating that Nvidia has resolved issues with its latest Blackwell chip line and anticipates “a good quarter next quarter” with strong demand.

Despite this optimism, analysts remain concerned about the broader market implications of the tariffs and the performance of major competitors in the artificial intelligence sector. Mark Hackett, chief market strategist at Nationwide, noted, “Weakening economic data is pushing investors out of equities and into bonds,” indicating a broader trend away from riskier investments.

Recent economic reports have cast a shadow on market sentiment, with new home sales plunging 10.5% in January and consumer confidence readings falling short of expectations. Thursday’s expected release of the personal consumption expenditures price index—an indicator closely monitored by the Federal Reserve—could further influence market dynamics and monetary policy.

Following Nvidia’s earnings report, shares of major tech partners such as Microsoft, Amazon, and Meta remained relatively stable, despite the company’s superior performance compared to forecasts. However, continued caution is palpable as competition intensifies in the AI landscape, particularly with recent advancements from rivals like DeepSeek.

Overall, Nvidia’s stock price has seen an increase of approximately 1,800% over the last five years, showcasing its dominance since the launch of ChatGPT in late 2022. The company’s ambitious infrastructure plans and strategic partnerships with tech giants position it favorably in the competitive chip manufacturing sector.