Lynx Equity: NVIDIA’s Minimal-Tariff Status Benefits Micron and Super Micro Computer (SMCI)

This article is not to be construed as investment advice. The author does not hold shares in any of the stocks discussed herein.

NVIDIA’s Market Outlook Amid Tariff Uncertainty

NVIDIA’s stock has recently faced significant pressure due to ongoing tariff-related challenges. However, with President Trump indicating a potential easing of tensions, Lynx Equity is optimistic about NVIDIA’s prospects. They anticipate that NVIDIA will rebound to its previous highs, providing substantial benefits to key partners in its supply chain, notably Micron, a leader in high-performance memory and storage solutions, and Super Micro Computer (SMCI), renowned for its servers and liquid-cooled AI infrastructure.

Current Tariff Landscape

For those unfamiliar with the current trade environment, it is essential to note that President Trump has enacted a baseline tariff of 10% affecting all major U. S.trading partners, excluding China, which faces a steep 125% tariff. This situation is expected to last for 90 days as the U. S.negotiates trade agreements with its partners.

Additionally, it’s important to acknowledge that tariffs on vehicle and auto parts imports remain at 25%.Furthermore, the U. S.maintains import levies on aluminum and steel, while China has imposed an 84% tariff on all imports from the U. S.

.@AnnaEconomist‘s work suggests roughly similar levels of tariffs under the new announcement. Certainly not looking like a big relief here.pic.twitter.com/C4sRzDv014

— Bob Elliott (@BobEUnlimited) April 10, 2025

The Implications of Current Tariffs

Despite a sense of optimism surrounding potential tariff reductions, it is crucial to highlight that the average tariff rate imposed by the U. S.has not significantly decreased. This stagnation is largely attributed to the continued punitive tariffs on Chinese imports.

Strategic Tariff Mitigation by NVIDIA

The key takeaway here is that Lynx Equity posits NVIDIA has developed a sophisticated multi-layered strategy to navigate U. S.tariffs successfully. Most components for NVIDIA’s AI servers are sourced from outside the U. S.and are assembled by system integrators in Taiwan, effectively allowing the company to avoid many tariffs.

Moreover, Lynx Equity suggests that it is unlikely for China to impose punitive tariffs on NVIDIA, given China’s ongoing reliance on NVIDIA products.

“Due to tariff mitigation plans NVDA has in place, we are now calling for NVDA to return to recent highs, despite potential downside to data center capex expectations.”

Future Stock Predictions

Lynx Equity’s analysis suggests that NVIDIA has the potential to achieve a stock price target of $140, reflecting a price-to-earnings ratio of 31x based on consensus EPS expectations for 2025.

Additionally, the firm believes Micron and Super Micro Computer stand to reap considerable benefits from NVIDIA’s adept tariff management:

“As part of the NVDA supply chain, we reiterate our preference for MU at $125 target price and SMCI at $60 target price.”

Noteworthy Market Players

In conclusion, Lynx Equity also anticipates that Dell may emerge as a significant beneficiary in the current economic climate, further underscoring the dynamic changes in the tech sector.

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