Three AI stocks that can survive the Trump tariff storm
The threat of tariffs looms on many companies to make many companies more expensive. If it is the sole source of the product, consumers or businesses can refrain from purchasing them to wait for tariffs in the hope that they will be reduced.
Furthermore, when customs duties generally make products more expensive, they can reduce consumer confidence and reduce expenditures across the board.
Many investors are worried about this, and the stock market has been selling very much over the past week. But I think the three companies will be able to survive the storm caused by President Trump’s tariff policies.
Many companies can (and will likely) have issues on the other side of these tariffs, but I’m focusing on AI hardware suppliers. These are the companies that are most affected by tariffs. nvidia (NASDAQ: NVDA), Taiwan Semiconductor Manufacturing (NYSE: TSM)and Broadcom (NASDAQ: AVGO) We are all the important suppliers of AI Hyperschools and I think they will be truly uplifting amid the tariffs.
reason? Large AI companies cannot live without the products of their hardware suppliers. nvidia makes it Graphic Processing Unit (GPU) It is deployed in a huge amount to train AI models, and once deployed, it is operated.
The GPUs and the infrastructure that supports them are the best in the game and rarely competes. Including other competitors also brings out the same fear as Nvidia, as they source portions from outside the US as well. Considering how important the GPU is to AI racing, the company is fine.
Broadcom belongs to a similar business. There are many connection switches and custom AI accelerators (call XPUs), and these two product lines in particular are expected to bring about great growth in the coming years.
Currently, only three companies are using Broadcom XPUs, and by 2027 the division will pursue market opportunities of between $60 billion and $90 billion. However, four more customers are running the XPU, so this is an added opportunity. This is going to be a huge growth, given the revenue totaling $54 billion over the past 12 months.
There are some fears centered around these two tariffs, but the push for AI hegemony is much greater. As a result, investors should look past the short term and realize that Nvidia and Broadcom still have many long-term possibilities.
Taiwan Semiconductors (or TSMC for short) are the leading suppliers for both of these companies. Neither can actually manufacture chips, so you have to get them from somewhere, and TSMC is the best option available on high-end chips.
President Trump threatened to collect tariffs on Taiwan, but that threat appears to have faded after TSMC announced an additional $100 billion investment in US semiconductor production facilities.
Taiwan’s president and CEO of Taiwan Semiconductors denied that President Trump forced the expansion, but the final result is the same.
Therefore, one of the most important suppliers who may have raised prices for Nvidia and Broadcom products now does not need to worry about customs duties. These three are currently not subject to customs duties at least.
These three are likely to continue selling until the market is convinced that the tariff threat is gone, giving investors a great opportunity to buy stocks at great prices.
Following the sale, these three find themselves at a price range that is rarely seen over the past year.
First, Taiwanese semiconductors look ridiculously cheap with 18.8 times the advance revenue. It is one of the most important companies in the world, but is traded at a lower multiple than a wider multiple S&P 500 (snpindex: ^gspc)with a large futures revenue of 19.8. This pricing discrepancy doesn’t make much sense. Investors should be hit by opportunities.
Nvidia is very cheap considering how important GPUs are, and the decline from where they spent most of 2024 is another great opportunity to buy stocks at a low price.
Finally, Broadcom is the most expensive, but if the XPU market starts as predicted, this could be the price of a bargain for the stock.
All three stocks Looks like a great purchasehowever, investors need to have a long-term mindset. Companies can make successful investments over a three- to five-year time frame. However, it is not possible to call the bottom of the market in the middle of a sale, so there may be even more short-term pain.
Consider this before purchasing shares on Nvidia.
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Kisen Drury He has positions in semiconductor manufacturing in Nvidia and Taiwan. Motley Fool has been appointed as a semiconductor manufacturing company for Nvidia and Taiwan, and is advocating it. Motley Fool recommends Broadcom. To Motley’s fool Disclosure Policy.
