Nvidia Stock Surges as Tariff Relief Revives Market Confidence | Image Source: www.investors.com
WASHINGTON, D.C., April 14, 2025 – Nvidia (NASDAQ: NVDA) closed over 3% more last Friday, ending a lost series of weeks that had investors on board. The recovery followed a major policy change by the US government, announcing that semiconductors and other electronic devices would be temporarily exempt from additional retaliation against China. At the opening of markets this week, this decision emerged across the technology sector – by removing key players such as Apple, Dell, Super Micro Computer and Taiwan Semiconductor – and restoring some optimism for companies affected by geopolitical winds.
Why did Nvidia bounce?
The sudden rebound of Nvidia’s stock was not only a fluctuation, but reached the heels of a key political announcement. According to U.S. customs and border protection, smartphones, memory chips, servers, hard drives and the GPU will now be exempt from the 125% retaliation rate, a move aimed at softening the U.S. technology sector. For Nvidia, who relies heavily on Chinese manufacturing and supply chains, this change offers space to breathe.
Despite the rally, Nvidia’s action remains nearly 20% lower than that of the current year, highlighting the volatility that investors have suffered in recent months. However, analysts remain largely abusive. As GuruFocus followed, Wall Street set an average 12-month price of $169.60, which means a possible disadvantage of more than 50% of current levels.
What do analysts say about Nvidia’s perspective?
Even with imminent geopolitical uncertainty, Nvidia is still considered one of the most strategically positioned companies in the technological space, especially with the continued expansion of demand for IA and data centres. Citi’s Atif Malik recently adjusted its price target for Nvidia to $150, less than $163, by assigning the change to the hyperscale budget cuts that affect GPU orders. However, Malik maintained a “Buy” rating, highlighting Nvidia’s potential disadvantage through regional tariff exemptions.
UBS was stuck with a higher target of $185, citing strong Taiwan export data and persistent demand driven by IA. In addition, TD Cowen, while reducing its target from $175 to $140, reiterated that Nvidia was his best choice in the calculation segment. KeyBac has also doubled its target of $190 and an “overweight” rating, noting that current supply problems are short-term, while income dynamics remain strong.
Are tariff exemptions a game change for technicians?
According to Trade Secretary Howard Lutnick, tariff relief is only temporary. Speaking on Sunday, Lutnick said that sector-specific tariffs for electronics and semiconductors could be relocated within one month. However, for the time being, exemptions apply to over $385 billion in 2024 imports, including $100 billion from China alone, with average electronic tariffs falling from 45% to 5%.
This change was widely interpreted as a concession to increased political and commercial pressure. President Donald Trump had been strongly criticized for the economic fall in his aggressive pricing strategy, which had led him to temporarily stop most reciprocal tariffs a few days after they were implemented. Although the 20% tariff for Chinese electronics – largely linked to the application of fentanyl – remains, this normative pivot marks a remarkable softening of tone.
What is Tech Giants for the Benefits?
Apple, Nvidia, Dell, Taiwan Semiconductor and Super Micro Computer are among the biggest beneficiaries of the revised tariff landscape. Apple, in particular, saw its iPhone production change significantly, with Bloomberg reporting a 60% increase in India-based manufacturing over the past year. The company is now making one fifth of its iPhones in India, reducing its dependence on Chinese factories.
Investors responded positively. Apple’s shares increased by 5.2% last week to $198.15, rebounding by a low of 11 months. Nvidia’s stock was also reversed, increasing from 17.6% to $110.93. Meanwhile, Dell won 14.4% last week to reach $81.93 and Super Micro Computer jumped from 11.2% to $33.15. Even traditionally slower moving stocks like Hewlett Packard Enterprise and Best Buy win the saw, HPE increasing by more than 10% and Best Buy advancing in pre-market trade.
Q Pulp: A: What investors are asking now
Q: This rally of sustainable actions?A: In the short term, yes. Tariff relief reduces pressure on margins and supply chains. However, if exemptions are lifted by one month, markets could reverse the trend so quickly.
Q: Will Nvidia continue to sell AI chips to China?A: For now, yes. The Trump administration recently allowed Nvidia to continue selling H20 AI chips to China, after considering stricter restrictions. This decision adds a level of certainty – at least temporarily – for one of Nvidia’s most profitable segments.
Q: Do e-businesses relocate their supply chains?A: Some are. Apple, for example, has steadily increased its manufacturing footprint in India. But changing the entire production lines takes years. At present, companies remain closely linked to Chinese supply chains.
Q: What is the greatest risk to Nvidia?A: Uncertain. With contradictory messages from several corners of the White House, including divisions on Lutnick’s statements, companies find it difficult to plan in the long term. Dan Ives of Wedbush captured this feeling, writing that “the mass confusion created by this constant flow of news becomes dizzying for industry and investors”
What’s next for the technical sector?
We must not deny that this is a precarious moment for the technological industry. On the one hand, global demand for AI solutions, cloud infrastructure and mobile devices remains strong. On the other hand, political volatility and geopolitical manoeuvre make strategic planning for companies like Nvidia and Apple almost impossible.
Thursday will bring another crucial moment: Taiwan Semiconductor, a vital supplier for Nvidia and Apple, will earn Q1 gains. The results could strengthen Wall Street’s position or dominant concerns about supply chain reliability and geopolitical exposure.
By adding fuel to the fire, President Trump published in Truth Social during the weekend, saying that “NOBODY is defusing the hook” and reaffirming that the United States “will not be taken hostage by other countries, especially hostile trading nations like China”. His rhetoric suggests that the repellent is a temporary deviation rather than a change of direction.
Finally, the next few weeks can determine whether the current technological rally has legs, or whether it’s just a sugar rush before another commercial shock hits the market.
For investors, the leak is as follows: Although the foundations such as demand, innovation and product cycles remain important, the largest short-term pilot project can be policy. And when politics is so fluid, volatility becomes the new norm.
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