Stocks semiconductor giant nvidia (NASDAQ: NVDA) It surged 18.7% on April 9th after President Trump announced a 90-day hiatus on higher “mutual tariffs.” Instead, he approved a “10% retrograde tariff reduction” in line with the 10% baseline tariff set for all imports.
Investors have long been concerned about the US government’s decision to impose import duties on products from various trading partners. Many US stocks saw a dramatic decline in early April 2025, as this could lead to rising costs, disruption in the supply chain, and retaliation tariffs on American goods.
Nvidia’s shares have fallen nearly 25% from its recent high in January 2025. This is not a very encouraging sign, but it is a solid improvement with a nearly 38% drawdown from HIGH on April 4th.
So does the valuation correction offer an opportunity for investors to buy or sell NVIDIA stocks now? Let’s look into it.
Regulation risks have emerged as a major headwind for Nvidia. In April 2025, the US government announced its decision to collect 32% tariffs on imports from Taiwan and 34% tariffs from China. China responded by collecting 84% retaliation tariffs on US imports in retaliation, and the US government raised tariffs on Chinese imports to 104%.
Semiconductors are excluded from this set of tariffs, but there is a signal of potential escalation in the trade war between the US and China.
Jeffreys Analysts fear the possibility of additional sector-specific tariffs in subsequent rounds, including semiconductors. If true, it could lead to significant supply chain disruption and margin pressure for Nvidia, given the company is heavily dependent Taiwan Semiconductor Manufacturing Fab for chip manufacturing.
The US government has long been pondering the tighter control over chip sales to China. The recent energy efficiency guidelines introduced by the Chinese government have urged businesses to use chips that comply with new data centers and strict requirements for expansion. Nvidia’s bestselling H20 chips do not meet these requirements and could hurt the company’s Chinese business. This accounts for almost 13% of revenue for fiscal year 2025 (ends January 26th).
Nvidia has also encountered competitiveness, but other chip makers are far behind in the AI (AI) race. The company is also experiencing short-term total margin pressure due to the continuous ramp-up of the Blackwell system.
Despite these challenges, multiple catalysts will be able to raise Nvidia’s stock price in the coming months.
Nvidia enjoys an unparalleled technological edge with AI computing. This is clear considering its share of over 90% in the AI GPU market. The company has developed a robust AI infrastructure optimized for several AI computational workloads with significant growth opportunities. These include pre-training scaling or building and upgrading basic models with a large amount of multimodal data, scaling or customising and fine-tuning basic models after training, and inference that includes complex inference.
Recently launched, Blackwell Architecture Systems is specifically designed for inference workloads (model deployment and execution models in real-time environments) across a variety of deployments, including on-premises, cloud, and hybrid. Blackwell is also optimized for computationally inferred inference workloads, showing 25 times higher token throughput and 20 times lower costs than a Hopper 100 chip. Therefore, Blackwell is expected to remain an important growth catalyst for Nvidia as enterprise demands continue to change from training workloads to more repeated inference workloads.
In addition to hardware, NVIDIA uses Compute Unified Device Architecture (CUDA) and other software platforms to build a solid software ecosystem with over 5.9 million developers. The company recently introduced software products such as NVIDIA AI Enterprise and NVIDIA Inference Microservices to enable businesses to effectively deploy AI solutions. The advantages of this software resulted in high switching costs, resulting in a sticky customer base.
Finally, the rapid adoption of AI agents and robotics has also proven to be a major growth vehicle for Nvidia. Blackwell Chips is positioned to benefit from evolving agent AI opportunities due to the computational power and low latency required for built systems that can make complex decisions and plan.
Nvidia trades at revenues prior to 24.45 times, much lower than its five-year average of 71.54 times. Therefore, it is clear that most risks are already priced at the company’s stock price.
However, Nvidia also has a history of rebounding after the Deep Falls. Some of the recent events can better highlight this trend.
This was seen in 2018, when more than 53% of stocks crashed from the peak in early October 2018 to the peak in late December 2018. NVIDIA stock has been over-accumulated, primarily due to the crash in the crypto market amid global technology sales. However, in 2019, stock prices were recovered more than 65% after stock levels were normalized and sales in gaming and data center segments began to show strong momentum.
Nvidia’s shares also crashed 30% from its recent peak in February 2020 from its low price in March 2020, crashing due to market-wide uncertainty and supply chain disruption during the early stages of the Covid-19 pandemic. However, by March 2021, stock prices had skyrocketed over 100%, driven primarily by increasing demand for gaming and data center services during the pandemic.
Finally, Nvidia’s stock has almost crashed 66% from November 2021 Until mid-October 2022, due to concerns about rising interest rates and supply chain disruptions. However, the stock has since recovered more than 200% by October 2023, focusing on explosive demand in the AI and data center markets and the company’s product innovations.
So historically, Nvidia has returned even stronger within 12 months of a significant share decline. Therefore, it makes sense for retail investors to acquire at least a small interest in this stock in order to benefit from future growth prospects.
Consider this before purchasing shares on Nvidia.
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Manali Pradhan There is no position in any of the stocks mentioned. Motley Fool has positions and is recommended for Jefferies Financial Group, Nvidia, and Taiwan Semiconductor Manufacturing. To Motley’s fool Disclosure Policy.
Nvidia’s shares have fallen 25% from its 52-week height. Should I buy, keep, or sell now? Originally published by The Motley Fool
