Nvidia (NVDA) has raised concerns over President Donald Trump’s proposed 15% tariff on U.S. chip sales to China, warning it could trigger multiple challenges. The warning comes as CEO Jensen Huang confirmed ongoing talks with the Trump administration over the company’s ability to sell its powerful Blackwell AI chip in China.
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NVDA stock is in the spotlight following the release of Nvidia’s Q2 FY26 earnings report this week. Although the company beat Q2 estimates, shares fell after the results, as Nvidia issued a cautious revenue forecast for the current quarter, suggesting that growth could be slowing after a two-year AI boom.
Nvidia Flags Legal Risks, Sales Impact
In a filing with the SEC, Nvidia stated that a proposed 15% U.S. government fee on AI chip sales to China could lead to legal issues, higher costs, and weaker competitiveness, even as the plan is still in its early stages of discussion. The company stated that such a request could also give competitors not subject to the same rules an advantage.
For context, earlier this month, the White House proposed allowing Nvidia and rival Advanced Micro Devices (AMD) to resume shipments of AI processors to China in exchange for a 15% commission on sales to the U.S. government. However, no formal regulatory action has been taken so far.
Nvidia Awaits Formal U.S. Plan
Along with the risks, Nvidia stated that the U.S. government has not yet outlined how such regulations would be enforced. Nvidia CFO Colette Kress said that unless the plan is formally enacted, the company should be able to continue China sales without paying the commission, and the proposal has not been included in its revenue forecasts.
Meanwhile, Huang is positive about the ongoing discussions with the Trump administration, though he acknowledged that there is no set timeline for a deal.
Is NVDA a Good Stock to Buy Now?
According to TipRanks, NVDA stock has a Strong Buy consensus rating based on 35 Buys, three Holds, and one Sell assigned in the last three months. At $212.0, the Nvidia average share price target implies a 17.7% upside potential.
Year-to-date, NVDA stock has gained 34%.
