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A surprising announcement from the White House is boosting many chip stocks, including Nvidia (NVDA) . According to President Donald Trump, the tariffs levied against China are going to be substantially decreased.
While little detail has been offered as far as Trump’s immediate plans for China tariff revisions, the market is reacting extremely well to this news. Nvidia is rising steadily, as are many of its peers in the artificial intelligence (AI) space.
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The tariffs have wreaked havoc on the global economy since President Trump first put them into effect. Despite his initial promise, they have failed to generate any type of economic growth so far and have mostly resulted in high prices and panic among consumers.
Despite these tariff-driven complications, Nvidia may be about to reap an unexpected benefit that could help push shares up in the short term, regardless of when Trump decreases the tariffs against China.
Nvidia is receiving good news from the East on multiple fronts
Over the past few weeks, Nvidia stock has struggled significantly, battling economic uncertainty as the tariffs continue to push down financial markets. For investors, this has led to a complicated outlook for the industry, even as companies have revealed plans to increase their AI spending in 2025.
As it turns out, though, that doesn’t just apply to tech firms in the U.S. Some of China’s most prominent companies have been stockpiling huge amounts of Nvidia’s H20 AI chips in preparation for darker days ahead, indicating a strong concern regarding supply in the near future.
Related: Former big tech CEO has shocking take on Nvidia
This list includes e-commerce leader Alibaba, tech conglomerate Tencent Holdings, and TikTok parent ByteDance. All three were likely bracing for an economic crisis in which shipments of these prized AI chips were cut off by U.S. government-imposed curbs.
Local media reported that companies had asked Nvida to ship an entire year’s supply of the AI-focused graphics processing units (GPUs) as soon as possible. While Nvidia designed this chip for the purpose of supplying Chinese clients with GPUs that complied with U.S. export policies, these companies seemed to fear that their shipments might be halted.
A Japanese media outlet provided further context on these developments, reporting:
“The three companies had asked Nvidia to ship a total of around 1 million H20s — roughly a full year's supply — as soon as possible, ideally by the end of May, one person briefed on the matter told Nikkei Asia. The actual number delivered fell short due to the Trump administration announcing in early April that these chips would need a license for export, the source added.”