Nvidia is getting whacked as Trump's tariff deadline draws near

  • Nvidia shares were under pressure Thursday as President Donald Trump’s deadline to raise tariffs on hundreds of billions of dollars worth of Chinese goods draws near.
  • At 12:01 a.m. ET on Friday, tariffs on $US200 billion worth of Chinese goods will increase from 10% to 25%, and a fresh 25% tariff will be placed another $US325 billion worth of Chinese goods.
  • Chipmakers are particularly sensitive to Chinese demand.
  • Watch Nvidia trade live.

Nvidia shares were getting whacked Thursday morning, down 4.5% near $US166 apiece, as the deadline for Presdient Donald Trump’s tariff increase draws near.

At 12:01 a.m. ET on Friday, tariffs on $US200 billion worth of Chinese goods will increase from 10% to 25%, and a fresh 25% tariff will be placed another $US325 billion worth of Chinese goods. This would be particularly bad news for Nvidia, and the rest of the semiconductor industry, as it is extremely sensitive to Chinese demand.

“China is an important market and it’s an important gaming market,” said Nvidia President and CEO Jensen Huang on the company’s quarterly earnings call.

Chipmakers were under severe pressure in late 2018 amid worries the trade war would drag on without a resolution, but rebounded sharply as it appeared the US and China were making progress toward a deal.

However, this week’s escalation has the sector once again under pressure, with Nvidia shares slumping more than 9% while rivals AMD and Intel have shed 7% and 10%, respectively.

Nvidia is currently trading more than 43% below its October peak.

“A major concern here, the products would be deemed mission-critical and the US would prevent shipments to China, or tax them heavily (a large buyer of GPUs),” RBC analyst Mitch Steves said in a note out on Monday.

“We think China trade talks will negatively impact our universe. Most notably, we think GPUs and Semi-cap are most at risk to the downside if tensions continue to rise.”

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