Lynx names Nvidia stock a top chip pick on tariff resilience

Published 10/04/2025, 14:14
© Reuters

Investing.com -- Lynx Equity Strategy named Nvidia (NASDAQ:NVDA) its top semiconductor pick as it believes the tech giant will better weather the broad wave of global tariffs that are expected to disrupt the tech supply chain.

“We think NVDA has in place a carefully crafted strategy to avoid nearly all tariffs, a rare semis company to have achieved that feat,” said Lynx analyst KC Rajkumar, adding that the company’s sourcing and manufacturing approach puts it in a favorable position.

Nvidia’s AI servers source components primarily outside the U.S. and are assembled by system integrators in Taiwan, which helps insulate the company from tariff exposure on both sides of the Pacific.

Lynx had previously been cautious on Nvidia and turned negative heading into its fourth-quarter earnings, predicting a 20-point drop in the stock.

The chipmaker’s shares indeed fell sharply in the aftermath, and Lynx noted that the sell-off may have contributed to broader weakness across semis and tech before tariffs became a major concern.

But now the brokerage holds a more positive view. “We are going to set aside our long-running caution and get onboard NVDA as perhaps the best idea in semis while the focus on tariffs lasts,” Rajkumar wrote.

Concerns over weaker data center spending and competition from models like DeepSeek may persist, but Lynx expects these issues to be overshadowed by Nvidia’s relative advantage under the new tariff environment.

“Due to tariff mitigation plans NVDA has in place, we are now calling for NVDA to return to recent highs,” the note added.

Lynx set a price target of $140, implying more than 22% upside from the last closing price. The price objective is based on a 31x multiple to consensus 2025 EPS of $4.55.

Apart from Nvidia, Lynx also reiterated its preference for Micron (NASDAQ:MU) at $125 and Super Micro Computer (NASDAQ:SMCI) at $60, while noting that Dell (NYSE:DELL) could benefit from Nvidia’s supply chain dynamics.

China, according to Lynx, is unlikely to impose tariffs on Nvidia products due to its continued reliance on the company's AI hardware. “NVDA’s minimal-tariff status is likely to boost its multiple relative to semis peers,” Rajkumar said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.