NVIDIA Corp.’s stock has been obliterated in recent weeks, but Monday offered a respite: Shares closed up 3.5% following a Wall Street investment bank report that the artificial intelligence (AI) chip leader could be exempt from the latest tariffs.
The company’s AI server products are likely exempt from the latest round of U.S. tariffs under the U.S.-Mexico-Canada Agreement (USMCA) because many of NVIDIA’s AI-server shipments seemingly come from Mexico, a potential relief amid broader investor concern over trade policy disruptions, according to Bernstein analysts.
“Among the many questions we fielded last week, one of the most frequent involved whether or not NVIDIA’s AI datacenter products would be subject to tariffs,” the analysts wrote.
Semiconductors have largely been left unscathed by reciprocal tariffs, but NVIDIA’s AI systems are considered primarily hardware and could be impacted unless they originate in compliant trade zones.
“Our (layman’s) read of the USMCA text suggests these product categories are in fact compliant with the agreement,” the note said, pointing to so-called Harmonized Tariff Schedule codes covered by the trade agreement.
Bernstein determined after studying NVIDIA’s import classification codes and trade data that about 60% of its AI server shipments in the U.S. came from Mexico last year, and another 30% from Taiwan in 2024. Such a percentage would make NVIDIA’s AI data center exports to U.S. hyperscalers from Mexico eligible for tariff exemptions announced last week, the analysts concluded.
“Servers imported into Mexico from elsewhere appear to garner similar treatment as well,” Bernstein added.
“We do believe the AI narrative is still real,” Bernstein said in assessing NVIDIA’s situation and rating the company’s stock as Outperform despite a recent 30% drop in NVIDIA shares. “And once things do settle down, hopefully soon! the stock at these levels is probably worth a look.”
Although NVIDIA is hardly scot-free from a wobbly market amid mounting tariff fears that have roiled tech’s biggest players, “There are encouraging signs that AI and other large data center equipment from certain vendors may be exempt from tariffs,” Daniel Newman, CEO of The Futurum Group, said. “I have been saying that the enterprise AI buildout is likely tariff resilient.”
