Nvidia’s Ascendancy: Why the Chip Giant Is the Post-Tariff Winner
25min read The U.S.-China trade truce, announced last week, has reshaped the investment landscape, but not all companies are created equal. While Amazon’s e-commerce model faces margin pressures and supply chain vulnerabilities, Nvidia (NVDA) stands as the undisputed leader in an AI-driven world, its stock primed to surge as trade tensions ease and demand for its chips skyrockets. Here’s why investors should double down on NVDA—and why Amazon (AMZN) lags in the rearview.
The Trade Truce Eliminates Worst-Case Scenarios—Nvidia Wins Bigger
The 90-day tariff pause and duty reductions by 115 percentage points have lifted a cloud over global trade, but Nvidia’s position is unique. Unlike Amazon, which relies on Chinese-manufactured goods for 80% of its top sellers, Nvidia’s AI chips are now free to flow globally without punitive tariffs, fueling partnerships like its $1.5 billion deal with Saudi Arabia to supply 18,000 AI chips for a new supercomputer.
The truce’s elimination of “145% tariff hell” has already sent NVDA shares up 5% this week. Meanwhile, AMZN’s stock remains stagnant—its Q1 earnings warning about “unpredictable tariff impacts” hangs like a sword over its margins.
AI Dominance: Nvidia’s Monopoly on the Future
Nvidia’s Blackwell chips, produced at TSMC’s U.S. plants in Arizona, are the backbone of the AI revolution. These chips power everything from self-driving cars to generative AI models, and demand is exploding. Wedbush analysts estimate that the global AI chip market will hit $200 billion by 2026—and Nvidia controls over 80% of it.
Amazon’s Alexa and cloud AI tools, by contrast, lag in compute efficiency. Even its $3.9 billion Q4 data center revenue pales next to Nvidia’s $35.6 billion in AI-driven Data Center sales—93% year-over-year growth.
Supply Chain Resilience: U.S. Manufacturing as a Moat
Nvidia’s $500 billion manufacturing push in Texas and Arizona isn’t just about avoiding tariffs—it’s about owning the supply chain. By partnering with TSMC, Foxconn, and Amkor, Nvidia is building “AI factories” domestically, capable of producing supercomputers like the DGX GB200 NVL72—systems with 72 dual-chip engines and 5,000-cable interconnects.
This vertical integration insulates Nvidia from trade wars. Amazon’s reliance on China-made components for 80% of iPhone sales (a key driver of its platform) leaves it exposed. Even its $500 billion investment in India’s manufacturing is a distant second to Nvidia’s $6.6 billion in U.S. subsidies via the CHIPS Act.
Valuation: Undervalued Nvidia vs. Overpriced Amazon
Nvidia’s stock trades at 25x forward earnings, while Amazon’s P/E ratio hovers at 30x—despite its lower growth trajectory. For every dollar of revenue, Amazon earns just 6% margins, compared to Nvidia’s 71% gross margins.
Nvidia’s $500 billion AI infrastructure pipeline (produced in the U.S.) and Middle Eastern partnerships are undervalued in its current stock price. Amazon’s valuation, meanwhile, hinges on a slowing e-commerce market and rising costs to bypass Chinese tariffs—a risky bet.
The Bottom Line: Buy Nvidia, Sell Amazon
The trade truce isn’t a reset button—it’s a spotlight on who’s prepared for the AI era. Nvidia’s dominance in chips, its $500 billion U.S. manufacturing bet, and its ability to capitalize on Middle Eastern AI deals make it a decade-defining investment. Amazon’s reliance on China and thin margins? A relic of the past.
The sell side is already on board: 17 of 22 analysts rate NVDA a “buy,” with a 12-month target of $350 (up from $315 pre-truce). Amazon? Only 9 of 25 analysts see upside.
Investors: Act now. The AI revolution isn’t waiting.
Andrew Ross Sorkin is the award-winning journalist and columnist for The New York Times. His analyses blend deep research with incisive market insights, making him a trusted voice in global finance.
