“Trump Tariffs” – another great buying opportunity?

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• Trump’s tariffs/trade wars get off to a flying start
• Arm and ASML, damage done or damage to come?
• Pugs in Tescos

If that’s enough to get the tariffs spreading, read on…

AI Collision 💥

Hold your breath.

Well I say that, but at the time of writing, the US market hasn’t opened yet. It’s a few hours away, so I don’t know exactly what’s going to happen…

But the crypto market has tanked, the Australian market has tanked and Asian markets… have tanked.

There’s a good chance the US market will be red.

I’ve used this meme before, but I shall use it again – there’s a good chance the market will look like this:

Why would this eventuality come to bear?

President Donald Trump and his quite busy action plan for his first 100 days.

Late last week Trump decided to levy 25% tariffs on Mexico and Canada. When asked about the UK and the European Union, he was confident there would be tariffs on the EU, yet on the UK he was somewhat non-committal.

It seems like the “special relationship” might actually have some pull after all… or in some way it probably affects Trump’s golf courses, thereby he might just leave the UK alone.

With global leaders scrambling and the markets in a permanent state of flux, no one quite knows what to do. Except Trump, he knows exactly what he’s doing.

The question is, what is this going to do to stocks? And more specifically for us, AI stocks?

Well, in the short term (as in this week) it’s probably not going to be good. Not because it’s going to slow down AI capital expenditure (capex) from the “Big Tech” giants, not because it’s going to slow down demand for AI chips and infrastructure, not because AI has suddenly stopped getting more intelligent.

No, AI stocks will head south because they are growth stocks. They are stocks tied to a massive investment trend that doesn’t have immediate payoffs. It’s an industry that is inevitably tied to a global supply chain. When it is unknown how much the supply chain will cost, the market will overreact.

Overreaction comes with unknowns. Think about it like this: Arm (ARM) provides the intellectual property (IP) for most of the world’s AI chip designs. Arm is a British company through and through. Its headquarters are in the UK. It generates income in both the US and the UK. But the company reports earnings in the US and the company is listed on the Nasdaq.

So, is Arm British or American? And if it’s British, would potential tariffs impact Arm? But Arm is also a key player in Trump’s $500 billion Stargate project to make America the AI capital of the world. Does Arm get a free pass then?

Then you’ve got a company like ASML Holding NV (ASML). I’ve written about this company before. It makes the EUV lithography machines that create silicon wafers. Without ASML, none of this AI future is possible.

ASML is Dutch. ASML exports its machines to the US. It is listed on the Nasdaq, but this is very much a European company (the most important European AI company there is). If the EU is lumped with tariffs, you bet this is going to impact ASML.

But then again, without ASML, this AI future is a bit more in limbo – and that’s not what Trump really wants.

This is why the market is unsure about everything because nothing is as black and white as here’s a 25% tariff on imports from Country A, B or C.

Ultimately these are power plays. Trump doesn’t like military war, that much is clear. If he has to use that weapon, he will, but it feels like it’s unwilling. And besides, he can’t roll tanks into Canada, Mexico or the EU.

But he can wield the power of the US economy to get countries to fall in line with the new American agenda. That’s what’s on display right now.

I don’t actually see this as being a problem for AI stocks. What is very obvious is the bulk of the big AI opportunities in the market right now are American companies. And if they’re not American, they will be very soon operating primary operations out of America.

This won’t damage the likes of Nvidia (NVDA), AMD, Broadcom (AVGO), Meta Platforms (META), Microsoft (MSFT) and the big players in AI. What this will do is make them temporarily cheaper. But long term, once the tariffs headwinds have died down, I don’t see this being some kind of long-term bear market unwinding these companies down.

If you continue to take a long view on the direction of our world, technology, AI and the immense need for all the bits and pieces that goes into it, then I can’t see any other outcome than when the market rips lower short term, it becomes another great buying opportunity.

Update: the “trade war” with Mexico and Canada lasted a day. Trump got on a call with both on Monday. By the end of the day the tariffs had been paused, reinforcements were on the way to the borders, and Trump got his way. As such, the market bounced and all the fear was for nothing. That said, there will be more of this kind of thing in the coming months. More unexpected moves from Trump to which the market will overreact short term. I see these as buying opportunities as this one played out to be, so always keep that in mind when volatility strikes.

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Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week.)

Boom 📈

• Veritone (NASDAQ:VERI) up 15%
• BigBear.ai (NYSE:BBAI) up 15%
• Vertiv (NYSE:VRT) up 10%

Bust 📉

• Brainchip (ASX:BRN) down 26%
• SK Hynix (KOR:A000660) down 13%
• Guardforce AI (NASDAQ:GFAI) down 10%

From the hive mind 🧠

• After all the brouhaha over DeepSeek, Microsoft has just gone and plugged it into its Azure AI and Github platforms.
• When the market is gettin’ you down, just read some crazy science stuff about how AI is going to help us understand the universe better.
• He loves a stealthy visit to the White House. There are no pictures, there was no grand press conference. And his company refused to even comment on it. But Nvidia CEO Jensen Huang and Trump had a private meeting at the White House last week. And you can bet your bottom dollar it wasn’t to talk about different kinds of leather jackets.

Artificial Polltelligence 🗳️

Our polls should be working again, albeit when I checked on last week’s results none of the votes were registered.

So we try again (how good is technology, right!)…

Weirdest AI image of the day

Tesco, Saturday night – r/weirddalle

ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision