TLDRs:
- Nvidia shares fell in Europe after Trump threatened new tariffs on major nations.
- Traders worry tariffs could dampen U.S. tech market momentum this week.
- Analyst upgrades highlight Nvidia’s AI growth despite macroeconomic uncertainties.
- Investors await February earnings for insight on demand and chip ramp-up.
Nvidia (NVDA) shares experienced a notable decline in European trading on Monday, closing down 2.2% in Frankfurt.
The drop came amid renewed concerns that U.S. President Donald Trump’s announcement of expanded tariffs on several European countries could ripple through major technology stocks. Alphabet and Microsoft also suffered, with shares sliding 2.4% and 2.2% respectively, while Nasdaq 100 futures fell 1.25%.
The market’s reaction reflects Nvidia’s position as a bellwether for risk appetite in the large-cap tech sector. Analysts note that while the U.S. markets were closed for Martin Luther King Jr. Day, European trading provided an early read on investor sentiment, showing caution in the face of geopolitical and trade uncertainties.
Tariff Threats Raise Investor Concerns
Trump’s plan, set to begin in February, involves a 10% import tariff on products from Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands, and Finland. Officials have framed this move as leverage to secure U.S. strategic interests, including the right to acquire Greenland.
Stephen Innes of SPI Asset Management described the tariffs as a “test of strategic alignment and institutional trust,” noting that the policy could influence European support for U.S. assets.
For Nvidia and other tech leaders, even minor disruptions to supply chains or investor confidence can trigger sharp market reactions, particularly given the stock’s sensitivity to macroeconomic events.
Analyst Upgrades Bolster Confidence
Despite short-term volatility, analysts have highlighted Nvidia’s strong long-term outlook. Wolfe Research recently added NVDA to its “Alpha List,” emphasizing the company’s continued expansion in AI infrastructure. Analyst Chris Caso noted that Nvidia shares have risen roughly 36% over the past year, with Blackwell and Rubin chip lines ramping as expected in 2026.
Caso also pointed to Google’s TPU as Nvidia’s main competitor in custom chips, but stressed that the company remains a critical player in data-center AI operations. This positions Nvidia favorably for sustained growth, even if tariffs temporarily cloud investor sentiment.
Eyes on U.S. Market Reopening and Earnings
With Wall Street reopening on Tuesday, traders are closely monitoring whether Europe’s tariff-driven decline will extend to U.S. markets. Historically, post-holiday sessions can see amplified volume and price swings, making the early trading session crucial for setting the tone.
Investors are also looking for clarity from Washington regarding the timing and scope of tariffs, as uncertainty can influence corporate spending on factories, chips, and servers. Nvidia’s next major milestone is its fourth-quarter fiscal 2026 earnings report on February 25, which will provide insights into demand trends, product cycles, and potential impacts of ongoing geopolitical tensions.
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