Nvidia, the renowned chipmaker, experienced a significant drop in its shares, falling nearly 9% on Monday. This decline comes after President Donald Trump confirmed that tariffs from Canada and Mexico will take effect on Tuesday. The company's shares have seen a downward trend of over 13% since Wednesday, following an earnings report that surpassed analysts' expectations. Despite the positive earnings, Nvidia's shares plummeted on a challenging day for the market, with the Dow dropping 800 points and the Nasdaq Composite sliding more than 3%.
Nvidia's chips are predominantly manufactured in Taiwan, while some of its sophisticated systems and computers are produced in other regions, including Mexico and the United States. The imposition of tariffs has raised concerns about potential impacts on the company's supply chain and production costs. Colette Kress, Nvidia's finance chief, addressed these uncertainties, emphasizing the need for clarity on the U.S. government's plans.
"Tariffs at this point, it's an unknown until we understand further what the U.S. government's plan is" – Colette Kress
Despite the recent market fluctuations, Nvidia remains optimistic about its future prospects. The company's revenue jumped 78% from a year earlier, reaching $39.33 billion. Data center revenue comprises about half of Nvidia's total revenue, indicating strong demand for its products. Nvidia's CEO, Jensen Huang, expressed confidence in the company's performance in the upcoming quarter.
"We're going to have a good quarter next quarter," – Jensen Huang
Nvidia's market capitalization has also been adversely affected by the recent share slide, shedding $3 trillion to stand at $2.79 trillion. The company's shares are now trading at levels last seen in September, prior to the U.S. presidential election. However, Nvidia officials remain steadfast in their plans for growth and expansion.
In a noteworthy development, Nvidia announced that it will manufacture chips in the newly unveiled $100 billion expansion of Taiwan Semiconductor Manufacturing facilities in the United States. This expansion was announced by President Trump on Monday, highlighting Nvidia's commitment to enhancing its production capabilities and meeting growing demand for its Blackwell chips.