Prediction: Here's How Trump's Trade War Could Play Out for Nvidia Over the Next 3 Years

Core Viewpoint - Nvidia is a leading player in the AI stock market, primarily due to its industry-leading GPUs, which are essential for the AI revolution [1] Group 1: Impact of Trade War on Nvidia - The trade war initiated by President Trump with China poses significant challenges for Nvidia, with potential long-term effects on the GPU industry [2] - Nvidia could potentially lose 100% of its sales to China, as restrictions on Chinese AI models may reduce demand for GPUs [3] - Export restrictions on GPUs are expected to directly impact Nvidia, with management estimating a loss of $2.5 billion in potential sales for the first quarter and an additional $8 billion for the second quarter [5] Group 2: Sales and Forecast Adjustments - Sales to China accounted for over 10% of Nvidia's total sales, with $4.6 billion in H20 chip sales recorded before export limits were enforced [5] - Nvidia has removed China from its sales forecasts, indicating a bleak outlook for the Chinese market [6] Group 3: Manufacturing Shifts - The trade war has led to uncertainty in manufacturing supply chains, prompting companies to consider relocating production to the U.S. to avoid tariffs [7] - Nvidia's CEO announced plans to invest significantly in U.S. manufacturing capabilities, with projections of procuring half a trillion dollars worth of electronics over the next four years [8] - However, manufacturing in the U.S. may be more costly, and securing rare-earth minerals from China could complicate these efforts [9]