April 7, 2025 – In a dramatic turnaround, shares of Nvidia (NVDA) and Super Micro Computer (SMCI) surged on Monday afternoon, spearheading a broader rebound in semiconductor and artificial intelligence (AI) stocks. This rally comes on the heels of a bruising tariff-fueled selloff that rattled markets last week, underscoring the resilience of the AI narrative despite macroeconomic turbulence. As of late trading, Nvidia’s stock price climbed nearly 4%, making it a top performer on the Dow Jones Industrial Average, while Supermicro soared over 10%, leading gains on the S&P 500. The PHLX Semiconductor Index (SOX), a key barometer of the chip sector, rose approximately 3%, buoyed by gains in other heavyweights like Broadcom (AVGO), Micron Technology (MU), Lam Research (LRCX), and Applied Materials (AMAT).
The volatility in chip and AI stocks reflects the market’s sensitivity to trade policy developments under the Trump administration. Last week, President Donald Trump unveiled a set of global tariffs that triggered a sharp selloff, with the SOX index dropping 7% on Friday alone. The announcement, coupled with China’s retaliatory measures, stoked fears of a prolonged trade war that could disrupt supply chains and squeeze profit margins for tech firms reliant on international markets. However, Monday’s session saw a whipsaw in sentiment following unconfirmed reports—later denied by the White House—that the administration might delay its tariff implementation. This flicker of uncertainty injected a dose of optimism into the markets, prompting investors to reassess the battered tech sector.
Nvidia, a linchpin of the AI ecosystem, has been a focal point for investors navigating this turbulence. The company’s GPUs (graphics processing units) power the data centers driving generative AI technologies, making it a bellwether for the industry’s growth prospects. Bernstein analyst Stacy Rasgon captured the prevailing sentiment in a note to clients: “We are not sure where Nvidia (or anything else) will bottom in the near term. But 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.” Rasgon’s cautious optimism highlights a broader conviction that AI’s long-term potential remains intact, even as short-term headwinds loom.
Super Micro Computer, a key Nvidia partner, also capitalized on the rebound. The server maker’s stock has been on a rollercoaster ride in 2025, gaining nearly 40% year-to-date through Friday’s close, yet still grappling with accounting and governance challenges that have shaved over 60% off its value from a year ago. Monday’s 10%+ surge reflects renewed confidence in Supermicro’s role in the AI infrastructure boom, particularly its hardware designed to house Nvidia’s cutting-edge Blackwell chips. Analysts at JPMorgan recently upgraded the stock, citing robust demand for AI servers as a potential catalyst, provided the company can navigate its regulatory hurdles.
The broader market context adds another layer of complexity to this recovery. Major U.S. indexes oscillated between gains and losses throughout Monday’s session, a testament to the uncertainty swirling around Trump’s tariff threats. On his Truth Social platform, the President doubled down, warning that if China failed to retract its tariffs on U.S. goods by Tuesday, April 8, the U.S. could escalate its own measures. This saber-rattling contrasts with last week’s tariff shock, which saw chip stocks like Marvell Technology (MRVL) and Coherent (COHR) shed over 7% apiece. Yet, Monday’s rally suggests investors are betting—or perhaps hoping—that cooler heads will prevail, or at least that the AI growth story can weather the storm.
The resilience of AI stocks isn’t just a knee-jerk reaction to tariff rumors. Beneath the surface, the fundamentals of the sector remain compelling. Demand for AI infrastructure continues to surge as companies across industries—from tech giants like Microsoft and Meta to emerging startups—race to integrate generative AI into their operations. Nvidia’s dominance in this space, coupled with Supermicro’s complementary server solutions, positions both firms to capitalize on this trend. Even as tariffs threaten to raise costs or disrupt supply chains, the insatiable appetite for AI compute power could offset some of these pressures, at least in the eyes of bullish investors.
Still, risks abound. The tariff saga is far from resolved, and any escalation could reignite the selloff that pummeled chip stocks last week. Moreover, Nvidia’s stock, despite its Monday gains, remains vulnerable to concerns about valuation and competition. Chinese startup DeepSeek’s recent claim of developing a top-tier AI model without Nvidia’s most advanced chips has rattled some investors, though analysts like those at Wedbush argue it could ultimately drive broader AI adoption—and thus demand for Nvidia’s products. Supermicro, meanwhile, faces its own challenges, with delayed financial filings and governance issues casting a shadow over its otherwise rosy AI-driven outlook.
For now, the market appears to be in a wait-and-see mode. Technical analysts are eyeing key support and resistance levels for clues on where these stocks might head next. For Nvidia, a sustained move above recent highs could signal a return to its earlier 2025 momentum, while a drop below last week’s lows might spell further trouble. Supermicro’s chart tells a similar story, with its 200-week moving average providing a potential floor, and resistance near $66 and $97 looming as tests of bullish resolve.
As the dust settles from Monday’s rebound, one thing is clear: the AI narrative remains a powerful force in the market, capable of lifting stocks even amid geopolitical uncertainty. Whether Nvidia and Supermicro can sustain this momentum will depend on a delicate interplay of policy decisions, corporate execution, and investor sentiment. For now, the rally offers a glimmer of hope that the chip and AI sectors can navigate the tariff rout—and perhaps emerge stronger on the other side. Stay tuned as this story unfolds, with the tech world watching closely for the next twist in this high-stakes drama.
