Nvidia Stock Climbs on U.S.-China Tariff Cut

• Nvidia (NVDA) shares rose 4.5% to $121.86 in premarket trading, joined by Intel (INTC) up 3.87% to $22.25, Marvell Technology (MRVL) up 8.30% to $64.60, and Super Micro Computer (SMCI) up nearly 6% to $33.86, following a U.S.-China agreement to reduce tariffs for 90 days.
• Nvidia has increased GPU prices by 10 to 25%, including 10 to 15% for AI chips H200 and B200 and over 25% for the RTX5090 graphics card, to offset revenue declines from U.S. export restrictions banning advanced chip sales to China.
• Rising production costs at TSMC’s Arizona facility, where Nvidia’s Blackwell chips are made using 4-nanometer processes, are driving chip price hikes, as U.S. operational expenses are double those in Taiwan, amid ongoing U.S.-China trade and Taiwan-related geopolitical tensions.

The U.S. stock market is witnessing a surge in semiconductor stocks, driven by a breakthrough in U.S.-China trade negotiations that has temporarily alleviated tariff pressures. Nvidia (NVDA), the leading U.S. chip maker with a $2.84 trillion market cap, saw its shares climb 4.5% to $121.86 in premarket trading, reflecting investor optimism about the 90-day tariff reduction agreement announced by Treasury Secretary Scott Bessent. Other semiconductor companies also rallied, with Intel (INTC) gaining 3.87% to $22.25, Marvell Technology (MRVL) advancing 8.30% to $64.60, and Super Micro Computer (SMCI), a cloud computing server specialist, jumping nearly 6% to $33.86. The agreement, which slashes tariffs on U.S. and Chinese goods for three months while trade talks continue, has eased concerns over potential levies on foreign-made semiconductors, a threat repeatedly raised by President Donald Trump.

The semiconductor industry, central to the escalating U.S.-China rivalry, is navigating complex challenges. Nvidia, despite a 29% stock increase over the past 12 months, has faced a 13% year-to-date decline, largely due to export restrictions banning its most advanced chips from China. To offset revenue losses, Nvidia has raised prices on its graphic processing units (GPUs) by 10 to 25%, according to a Monday report from Taiwan’s DigiTimes. Specifically, prices for AI chips like the H200 and B200 have increased by 10 to 15%, while the RTX5090 graphics card, a top-tier PC component, now costs around 20 million won/approximately $14K, up over 25% since early this year. These price hikes, which also allow Nvidia’s distribution partners to adjust pricing, are a strategic response to declining revenues amid restricted market access.

Production costs are another pressure point. Taiwan Semiconductor Manufacturing Company (TSM), a key Nvidia supplier, has begun producing Nvidia’s Blackwell chips using 4-nanometer processes at its Arizona facility since the first quarter. However, operational costs in the U.S., including materials and logistics, are approximately double those in Taiwan, driving up chip prices to cover the increased expenses. This cost escalation, coupled with the geopolitical tensions surrounding Taiwan – a critical hub for global chip supply chains and a point of contention due to China’s territorial claims – underscores the industry’s vulnerability to trade and supply chain disruptions.

The tariff reprieve offers a temporary boost to investor confidence, particularly for companies like Nvidia, Intel, and Marvell, which rely on global supply chains and demand for advanced hardware to fuel the artificial intelligence boom. The exemption of chips from tariffs, for now, supports expectations of sustained demand for electronic goods, a critical factor for semiconductor firms. However, the 90-day window highlights the fragility of the current detente, as the industry remains exposed to potential policy shifts and the broader U.S.-China technological rivalry. Investors will closely monitor ongoing trade talks and geopolitical developments, particularly around Taiwan, as these factors will shape the semiconductor sector’s trajectory in the near term. For now, the premarket gains signal a market eager to capitalize on the reduced trade barriers, though the long-term outlook hinges on resolving these deeper structural challenges.

WallStreetPit does not provide investment advice. All rights reserved.

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