Nvidia (NVDA) Drops 3.11% Amid Tariff Concerns, Supply Chain Challenges

On April 3, 2025, Nvidia's stock experienced a 3.11% drop in pre-market trading, reflecting investor concerns and market dynamics.

China remains a crucial market for Nvidia, contributing $17.1 billion in revenue for the 2025 fiscal year. The recent announcement of a 10% tariff on all imported goods by the U.S. has added pressure on the company, as it could impact its supply chain and operational costs.

Nvidia's CEO, Jensen Huang, has acknowledged the potential long-term impact of tariffs, suggesting that the company may need to further diversify its supply chain to mitigate risks. The company has already invested $50 billion in U.S.-made chips and electronic components over the next four years, aiming to reduce its reliance on foreign suppliers.

Additionally, the demand for Nvidia's H20 chips has surged in China, driven by the popularity of AI models like DeepSeek. However, supply chain constraints and potential new export restrictions pose challenges for the company in meeting this demand.

In the new energy vehicle sector, China's dominance has led to increased demand for advanced chips, particularly for smart cockpits and autonomous driving features. While Nvidia's Orin chip has historically held a significant market share, domestic competitors like Horizon and Huawei are gaining ground, posing a threat to Nvidia's market position.