Quick Read
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Taiwan Semiconductor (TSM) surged 8% on earnings as Trump announced 25% AI chip tariffs. TSMC manufactures 90% of advanced chips from Taiwan.
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NVIDIA (NVDA) and AMD (AMD) manufacture all AI chips through TSMC in Taiwan. Both face margin compression without pricing power for 25% cost increases.
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Qualcomm and Apple face lower exposure than pure AI chipmakers. Qualcomm makes mobile chips while Apple only consumes chips internally.
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Trump’s 25% tariff on AI chips landed the same day Taiwan Semiconductor Manufacturing Company (TSMC) posted blowout earnings and dismissed AI bubble fears. TSMC’s stock surged 8% Thursday, pulling AMD up 12% and NVIDIA 3% in sympathy. Now investors face a critical question: which chip stocks are most exposed when the tariff hits?
The policy targets AI chips specifically, with exemptions still being negotiated. What matters: manufacturing location, supply chain concentration, and revenue mix. Here are the five stocks ranked by tariff exposure, from most vulnerable to least.
1. Taiwan Semiconductor Manufacturing (TSM)
TSMC sits in the crosshairs. The company manufactures 90% of the world’s advanced chips from Taiwan, the geographic epicenter of tariff risk. With $3.63 trillion in trailing revenue and 59.4% gross margins, TSMC has enormous profitability to protect. A 25% tariff on Taiwan-manufactured chips hits TSMC’s customers (NVIDIA, AMD, Qualcomm, Apple) first, but the pain cascades back to the foundry.
The company just raised 2026 capital expenditure guidance to $56 billion, signaling confidence in AI demand. CEO C.C. Wei told analysts that AI infrastructure spending would drive 30% revenue growth this year. That confidence now collides with tariff uncertainty.
TSMC’s Arizona fabs won’t save it near-term. The Phoenix facilities are ramping 4nm production, but represent a fraction of total capacity. Most AI chips, NVIDIA’s H100s and H200s, AMD’s MI300 series, still come from Taiwan. If exemptions favor domestic manufacturing, TSMC faces a brutal choice: accelerate costly US expansion or watch customers shift orders to Samsung’s Korean fabs.
The stock trades at 34x trailing earnings with a $1.70 trillion market cap. Institutional ownership sits at 16.3%, meaning any tariff-driven guidance cut triggers significant portfolio rebalancing. Thursday’s 8% rally on earnings looks precarious if tariff details disappoint.
2. NVIDIA (NVDA)
NVIDIA designs chips in California but manufactures them in Taiwan via TSMC. That makes every H100, H200, and upcoming Blackwell chip subject to tariff risk. The company generated $187 billion in trailing revenue with 70% gross margins—margins that can’t absorb a 25% cost increase without either raising prices (killing demand) or compressing profitability (tanking the stock).
CEO Jensen Huang has emphasized that AI infrastructure buildout is a multi-trillion-dollar, multi-year cycle. Gartner forecast $2.5 trillion in AI spending for 2026, with 49% allocated to infrastructure. NVIDIA captures the lion’s share. But if tariffs force hyperscalers to delay purchases or negotiate price cuts, NVIDIA’s 63% operating margins become a target.
The stock’s 2.3 beta means it amplifies macro shocks. Thursday’s 3% gain on TSMC’s earnings beat shows the market still believes in the AI story. But at 45x trailing earnings and $4.46 trillion market cap, there’s limited room for tariff-induced margin compression. Exemptions for AI infrastructure could save NVIDIA—if the company can prove its chips are critical to national competitiveness.
3. Advanced Micro Devices (AMD)
AMD’s 12% Thursday rally reflects its position as NVIDIA’s closest competitor in AI chips. The MI300 series is gaining traction in data centers, with Q3 revenue up 36% year-over-year to $9.2 billion. But AMD faces the same TSMC dependency as NVIDIA. Its chips are manufactured in Taiwan.
The difference: AMD has less pricing power. Where NVIDIA commands 80-85% gross margins on AI chips, AMD’s overall gross margin sits at 51.7%. A 25% tariff hits AMD harder because it can’t pass costs to customers as easily. The company is already fighting for market share against an entrenched competitor; tariff-induced price increases would make that battle steeper.
AMD’s $364 billion market cap and 1.95 beta make it more volatile than NVIDIA. The stock trades at 117x trailing earnings but just 36x forward earnings, reflecting expectations for rapid profit growth. Tariffs threaten that narrative. If AMD can secure exemptions for its data center chips—arguing they’re essential to competing with NVIDIA—the stock could outperform. Otherwise, margin compression looms.
4. Qualcomm (QCOM)
Qualcomm’s exposure is more nuanced. The company designs mobile processors and 5G chips, not AI accelerators. That puts it outside the tariff’s primary target. But Qualcomm still manufactures chips via TSMC and Samsung, creating indirect exposure.
The company generated $44.3 billion in trailing revenue with 26% operating margins, lower than NVIDIA or AMD. Mobile chip markets are more price-sensitive than data center AI, so Qualcomm has limited ability to pass tariff costs to smartphone makers. The stock dropped 11% over the past week, suggesting investors are already pricing in tariff risk.
Qualcomm’s saving grace: its chips aren’t explicitly AI-focused. If exemptions target AI infrastructure, Qualcomm might avoid the worst impact. But if tariffs apply broadly to all Taiwan-manufactured semiconductors, the company faces cost headwinds without the pricing power to offset them.
5. Apple (AAPL)
Apple is the least exposed. The company doesn’t manufacture AI chips for external sale. Its custom silicon (A-series, M-series) powers iPhones, iPads, and Macs. While those chips incorporate AI features, they’re not sold as standalone AI accelerators.
Apple’s $3.84 trillion market cap and consumer electronics focus insulate it from AI chip tariffs. The company’s supply chain includes TSMC-manufactured processors, but tariffs would hit Apple as a cost of goods sold issue, not a revenue threat. With 47% gross margins and $416 billion in trailing revenue, Apple can absorb incremental costs better than pure-play chip manufacturers.
The stock is down 5% year-to-date, underperforming the semiconductor rally. That divergence reflects Apple’s limited direct AI exposure. It’s not riding the AI infrastructure wave like NVIDIA or AMD. Tariffs reinforce that positioning.
The Bottom Line
TSMC and NVIDIA face the most acute tariff risk. One manufactures in the tariff zone, the other depends entirely on that manufacturing. AMD follows closely, with less pricing power to offset costs. Qualcomm and Apple sit further down the exposure curve, either because their chips aren’t AI-focused (Qualcomm) or because they’re end consumers rather than chip sellers (Apple).
Thursday’s rally on TSMC earnings shows investors still believe in AI demand. But tariff exemptions will determine whether that demand translates to profits. Watch for guidance cuts if exemptions disappoint, especially from TSMC and NVIDIA.
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