President Donald Trump’s “reciprocal tariff” plan has sent shockwaves through the market, with the S&P 500 and Nasdaq Composite experiencing their worst days since 2020. Companies reliant on global supply chains are taking a hit, but some tech stocks could be opportunities to buy low.
One stock that stands out is Nvidia (NASDAQ: NVDA). Despite being exempt from tariffs due to its semiconductor manufacturing outside the US, Nvidia’s stock fell nearly 8% after the announcement. The reason? Uncertainty over second-order effects and a rare downgrade by an analyst who believes pricing power has reached its limit.
However, Nvidia trades at a valuation of 35 times trailing earnings, which is unusually high but not unprecedented. Buying shares now could provide an even larger margin of safety in the long term. As the company continues to invest in AI, its potential for growth remains strong.
Another stock affected by tariffs is ASML (NASDAQ: ASML), which makes lithography machines essential for producing advanced semiconductors. Unlike Nvidia, ASML was not exempt from 20% tariffs on European Union equipment manufacturers. Despite this, the company’s stock fell nearly 7%, partly due to the cyclical nature of the semiconductor industry.
ASML’s monopoly position in making cutting-edge semiconductors with its advanced lithography machines makes it a compelling buy despite the uncertainty surrounding tariffs. The company’s prospects remain promising, especially considering the demand for AI applications.
CoreWeave (NASDAQ: CRWV), a newly minted public company, saw its shares fall 12% after the tariff announcement. As a GPU rental service provider for AI applications, CoreWeave was heavily impacted by Nvidia’s IPO hype not living up to expectations. With no track record as a public company and muted IPO performance, investors may want to take a wait-and-see approach.
In conclusion, while tariffs have hit tech stocks hard, some companies like Nvidia and ASML could be opportunities to buy low in the long term. Investors should consider their individual circumstances before making any investment decisions.
Source: https://finance.yahoo.com/news/3-tech-stocks-tanking-tariff-105800611.html