A new 15% “Trump tax” on Nvidia’s chip sales to China is doing little to slow down the stock market’s love affair with the world’s most valuable company. Investors seem to be shrugging off the news, focusing instead on the company’s explosive growth in the booming AI market.
Here’s a look at the math: In the first quarter, Nvidia sold about $5.5 billion worth of products to China.
The chips that are subject to the new tax make up about 80% of that, meaning the company could be sending around $700 million per quarter to the U.S. Treasury. That sounds like a lot, but for a company that makes over $20 billion in profit each quarter, it’s a relatively small “speed bump.”
After a brief dip on Monday when the tax was announced, Nvidia’s stock rallied to a new record high on Tuesday. The chipmaker’s shares have nearly doubled since April, pushing its market value past a staggering $4.4 trillion.
Analysts say that while the new tax creates some uncertainty, it’s not a major issue for a company growing as fast as Nvidia. The real story for investors is the red-hot demand for AI infrastructure, especially for Nvidia’s cutting-edge Blackwell chips.
“What’s more important is the trajectory of Blackwell,” said one analyst. “That’s what the market has priced in.”
Of course, some risks remain. Beijing has been encouraging its local companies to avoid using Nvidia’s chips, and there’s always the chance that the trade situation could change again. But for now, investors seem to believe that nothing can stop the Nvidia growth train.
