Why Nvidia Stock Is Sinking Today

Nvidia (NASDAQ: NVDA) stock is falling Thursday amid big sell-offs for the broader market. The company's share price was down 6.1% as of 2 p.m. ET. Meanwhile, the S&P 500 index was down 4.1%, and the Nasdaq Composite index was down 5.2%.

Stocks are sinking today following the Trump administration's announcement of its new tariff policy, and tech stocks including Nvidia are being hit particularly hard. The artificial intelligence (AI) leader's share price is also taking a hit after receiving an analyst ratings downgrade.

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Nvidia stock tumbles on new tariff outlook

The Trump administration held its "Liberation Day" event yesterday and outlined a series of sweeping new tariffs that will be implemented this month. A 10% tariff on all goods imported from foreign countries will go into effect on April 5, and a separate and additional set of reciprocal tariffs will then be implemented on April 9. It would be an understatement to say that investors aren't thrilled with the new import taxes. The semiconductor specialist relies on components and manufacturing services from companies outside the U.S., and the potential for trade-war dynamics to continue escalating means that the business could face tariff headwinds from retaliatory actions taken by other nations.

HSBC downgrades Nvidia stock

In a note published today, HSBC cut its rating on Nvidia from buy to hold. The firm also lowered its one-year price target from $175 per share to $120 per share. As of this writing, the new price target still suggests additional upside of roughly 16% -- but HSBC's analysts think that valuation dynamics have shifted in unfavorable directions for the AI hardware leader. In particular, the firm thinks that Nvidia's pricing power for its graphics processing units (GPUs) is softening and that the potential for significant earnings beats over the next couple years has weakened.

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HSBC Holdings is an advertising partner of Motley Fool Money. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.