Why Nvidia Stock Is Plummeting Today -- It's More Than Trump's Tariffs

Group 1 - Nvidia's shares are experiencing a significant decline, with a drop of 6.2% as of 1 p.m. ET and a peak decline of 7.6% earlier in the day, coinciding with a poor performance in the S&P 500 and Nasdaq Composite [1] - The decline is attributed to President Trump's newly announced tariffs, which are impacting stocks across the market, alongside a key rating downgrade for Nvidia [1][2] - Trump's tariffs on imports from Taiwan are set at 32%, although Nvidia has currently escaped direct tariffs due to an exemption for semiconductors [2] Group 2 - The semiconductor industry, including Nvidia, remains at risk as the administration indicated that tariffs on semiconductors will be addressed separately, leaving the possibility of future tariffs open [3] - There is a high likelihood that China and other major trade partners will retaliate with their own tariffs or restrictions on companies like Nvidia, potentially impacting their ability to sell in these markets [3] - HSBC analyst Frank Lee downgraded Nvidia's stock from a buy to a hold, reducing the price target from $175 to$120, citing challenges in raising prices for AI chips and a lack of significant revenue growth from new hardware [4] Group 3 - Lee noted increasing mismatches and inconsistencies in Nvidia's supply chain, which could hinder the realization of bullish earnings scenarios [5] - While there are potential catalysts in robotics and autonomous vehicles, the market requires more visible revenue attribution for Nvidia to regain investor confidence [5] - Despite the downgrade and market headwinds, there is a belief that Nvidia can adapt, although turbulence is expected due to market uncertainties [5]