Most analysts on Nvidia’s earnings call focused their questions on topics such as the AI chip leader’s rollout of its next-generation Blackwell platform, as well as the company’s margins and supply chain. But Donald Trump-sized questions hang over the semiconductor industry at large, however, and CEO Jensen Huang took an inquiry into what the president-elect’s return to the Oval Office could mean for the business. .
Trump’s demands for global tariffs will likely affect Nvidia. Despite his generally tough rhetoric on China, previous comments that cast doubt on the U.S. commitment to help Taiwan defend itself against a possible Chinese attack weighed on the chip stock. Taiwan is home to Nvidia’s prominent supplier, TSMC.
“The unpredictability of the president-elect is now basically an overhang on all of tech,” said Ted Mortenson, Baird’s managing director and tech desk sector strategist.
Whatever else the Trump administration decides to do, Huang said, Nvidia will be involved.
“This is our highest mandate,” he said. “We will fully comply with any regulations that come in.”
Nvidia, as well as other chipmakers, have struggled to make chips for the Chinese market to meet export controls imposed by the Biden administration, which is reportedly considering additional measures on sales to wealthy countries in the Persian Gulf. is doing
Sales to China, which once accounted for a quarter of the company’s revenue, accounted for just 12 percent of business last quarter, according to Bloomberg. Angelo Zeno of CFRA Research said the Trump administration’s more trade-off approach to China than the current administration’s sanctions could potentially benefit the world’s largest company.
China is currently one or two generations behind in AI chip development, he said in a recent note.
“According to our Washington analysis team, Trump may be willing to offer more advanced AI chips to other nations, even China, if the price is right, while maintaining a certain technological edge,” he wrote. .
Still, Trump’s proposed universal tariff could pose challenges, given that 57% of Nvidia’s business is overseas, according to Bloomberg. Nvidia CFO Colette Kress said the deployment of GPUs in India has grown 10-fold, driving the demand for so-called “autonomous AI,” or nations investing in their GenAI infrastructure.
CFRA believes autonomous AI could account for $11-12 billion in revenue this year. After all, no matter who’s in the White House, Nvidia’s value to the U.S. as a national security asset remains high.
“There’s a concern that it’s now a national defense company,” Mortensen said.
Among the many unknowns, it’s clear that Huang and his company will have to navigate more than just meeting the intense demand.
