Investing.com -- Nvidia’s AI server products are likely exempt from the latest round of U.S. tariffs under the US-Mexico-Canada Agreement (USMCA), a potential relief amid broader investor concern over trade policy disruptions, Bernstein said.
“Among the many questions we fielded last week, one of the most frequent involved whether or not NVDA’s AI datacenter products would be subject to tariffs," Bernstein analysts wrote.
While semiconductors have largely been exempt from reciprocal tariffs, Nvidia’s AI systems are "primarily hardware" and thus could be affected, unless they originate from compliant trade zones.
Based on import classification codes and trade data, the majority of NVDA’s US AI server shipments likely come from Mexico, with data showing roughly 60% of imports in key server categories arriving from Mexico in 2024 and another 30% from Taiwan.
Using Nvidia’s own product classification and U.S. Harmonized Tariff Schedule codes, specifically 8471.50, 8471.80, and 8473.30, the analysts mapped Nvidia’s AI server components like DGX and HGX form factors.
"Our (layman’s) read of the USMCA text suggests these product categories are in fact compliant with the agreement," the note said, pointing to several HTS sections listed as covered by the trade pact.
That would make Nvidia’s AI datacenter exports to U.S. hyperscalers from Mexico eligible for tariff exemptions under last week’s announcement.
"Servers imported into Mexico from elsewhere appear to garner similar treatment as well," Bernstein added.
Even so, Nvidia (NASDAQ:NVDA) shares have slumped 30% year-to-date, with half of the losses coming just since Tuesday, as the so-called “Trump Tariff Tsunami” hit tech broadly.
Bernstein noted the company’s stock is now trading at around 20 times forward earnings — its lowest level in nearly a decade — despite continued belief in long-term AI growth.
"We do believe the AI narrative is still real. And once things do settle down, hopefully soon! the stock at these levels is probably worth a look," the analysts wrote as it rates Nvidia “Outperform.”