Nvidia Stock Outlook: 2024 Election Uncertainty and AI Chip Demand

Nvidia may be affected by the 2024 U.S. presidential election, but its new AI chips are in great demand.

As the 2024 U.S. presidential election gets closer, Nvidia, the biggest maker of AI chips, finds itself at the center of technical progress and political insecurity. The outcome may affect the company’s future performance, which could affect corporate taxes, foreign trade, and AI regulations.

The Republican nominee, former President Donald Trump, has put forward several ideas that could impact Nvidia’s business. Among these are keeping the tax cuts he made for businesses during his first time in office and possibly lowering the rate even more, to 15%.

This could help Nvidia make more money, but it might not have a big effect because its real tax rate has been well below the suggested 15% for many years.

Trump’s views on international trade, especially his plan to put high taxes on imports, are a bigger problem for Nvidia.

The company depends a lot on factories outside of the U.S., like those in China. A suggested 60% tariff on imports from China and up to 20% on imports from other countries could make it more expensive for Nvidia to make things. Most likely, the business would try to charge customers more for these costs, which could affect demand.

In their plan, Republicans also want to get rid of President Biden’s order on AI safety and security. This decision might be good for Nvidia because it might lead to more investment in the creation of artificial general intelligence (AGI), an area where current rules have raised safety concerns.

Even though these policy changes might happen, Nvidia’s main business is still doing well. Huang, the CEO, recently said that people can’t get enough of the company’s new Blackwell AI computers, which will come out in the fourth quarter of 2024. These chips claim to be 2.5 times faster than the Hopper series chips that came before them.

Both Democratic and Republican administrations have been good for Nvidia’s stock. When Trump was first elected, the stock’s value went up more than five times. It’s gone up almost nine times since Biden took office. This shows that the main thing that drives Nvidia’s success is still the growing demand for its AI chips, even though government policies can have an effect on the company.

When they came out in March 2024, the Blackwell chips were billed as “processors for the generative AI era.” The tech industry is very excited about their upcoming release; Huang said, “Everybody wants to be the first to get their hands on it.”

Even though there have been changes in politics, Nvidia’s stock has held up well. It recently rose 1.6% to close at 118.85. This shows that investors are still optimistic about the company’s long-term chances, even if the political situation changes.