Many investors are concerned about the impact that tariffs will have on Nvidia‘s (NVDA 3.86%) stock, but Nvidia has already taken steps to circumvent these tariffs: Its most powerful GPUs will be entirely produced in the U.S. This is a massive win for the country, as some of our most critical products won’t need to be sourced from outside our borders.
However, there are still a few key factors to know about Nvidia’s Blackwell GPUs being produced in the U.S., as the company can’t flip the switch to produce these here tomorrow.
Nvidia has a ton of tailwinds blowing in its favor
Nvidia announced that its Blackwell chips, the company’s current most powerful graphics processing units (GPUs), will be produced entirely in the U.S. Now, this isn’t happening tomorrow, but its production is expected to ramp up in the next 12 to 15 months.
Components for these GPUs will come from Taiwan Semiconductor Manufacturing‘s (NYSE: TSM) chip facility in Phoenix, Foxconn‘s facility in Houston, and Wistron’s facility in Dallas, with final assembly occurring in Nvidia’s plant in Texas. While Nvidia may be unable to avoid an upcoming semiconductor tariff that President Trump has alluded to, there could be carve-outs for companies with plans to move production into the U.S.
Regardless, Nvidia will be able to overcome these tariff concerns in the coming months, so investors won’t need to worry as much about the impact of tariffs on Nvidia. Instead, they can focus on AI.
AI growth is still occurring, even if it has taken a back seat to tariff concerns. This is a once-in-a-lifetime opportunity, and competitors could leave behind companies that are afraid to invest in AI infrastructure. This is a key reason why Nvidia sees data center capital expenditures rising from $400 billion in 2024 to over $1 trillion by 2028. Considering that Nvidia gets a huge chunk of that data center spend (it generated $115 billion from its data center segment over the past 12 months), its revenue will increase alongside the capital expenditures.
Still, there are some concerns about what the Trump administration will do with some of Nvidia’s foreign exports. Recently, Nvidia was forced to write off $5.5 billion in inventory for H20 chips that were specifically created to meet export guidelines for chips that can be exported to China.
The rules have changed, and those chips can no longer be exported, so Nvidia will eat the cost of those products during its first-quarter fiscal year 2026 results. While this will hurt Nvidia’s profits for the quarter, Nvidia had around $43.2 billion in cash and equivalents sitting on its balance sheet as of the end of Q4, so it won’t drastically affect the company.
However, the market crushed Nvidia on the news by selling off the stock by 5%. Now, at Nvidia’s market cap of $2.7 trillion, a 5% drop indicates a market cap loss of $135 billion. The market clearly overreacted to this news, and it opens up a prime buying opportunity.
The stock hasn’t been this cheap in a long time
Investors need to keep their eyes on the future, including GPUs made in the U.S. and expanding data centers for AI, not a write-off in the past. It’s clear that Nvidia still has a ton of great prospects in front of it, and the price that you pay today is an absolute steal.
NVDA PE Ratio data by YCharts
Nvidia’s stock now trades at 23 times forward earnings, which is just barely more expensive than the broader market (measured by the S&P 500 index (SNPINDEX: ^GSPC)), which trades at 19.8 times forward earnings. The forward P/E ratio only takes into account one year of growth, yet we know that Nvidia has multiple years of strong growth left due to data center expansion.
This makes Nvidia a no-brainer purchase here, and investors need to focus on what’s happening with Nvidia years down the road, rather than the short-term tariff fears that won’t matter as much due to Nvidia moving its Blackwell production to the U.S.
Keithen Drury has positions in Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.