A federal court strikes down Trump’s tariffs … Nvidia knocks it out of the park again … the TACO trade is here… specific AI stocks to buy now…
As I write Thursday near noon, the markets are digesting two big headlines from yesterday afternoon.
First, U.S. Court of International Trade struck down President Trump’s global tariffs, saying he lacked the authority under the International Emergency Economic Powers Act of 1977 (IEEPA) to impose the Liberation Day tariffs.
From the panel of judges:
The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder…
The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.
The panel ruled that the U.S.’s trade deficit didn’t meet the law’s definition of an “unusual and extraordinary threat.”
Now, the court’s ruling doesn’t affect all tariffs. Some levies on specific products including aluminum and steel aren’t impacted because Trump didn’t anchor those tariffs on the IEEPA ruling.
The Trump administration has already submitted an appeal. Here’s CNBC:
A top economic advisor to President Donald Trump expressed confidence Thursday that court rulings throwing out aggressive tariffs will be overturned on appeal.
Kevin Hassett, director of the National Economic Council, said in an interview that he fully believes the administration’s efforts to use tariffs to ensure fair trade are perfectly legal and will resume soon.
The administration has 10 days to issue new executive orders in response to the injunction.
So, what happens to trade deals now?
Surprise, surprise – more uncertainty!
Here’s The Wall Street Journal:
The order blows a hole in global trade talks, already under way with more than a dozen nations, which began after the reciprocal tariffs were imposed.
It also throws into question recent agreements with the United Kingdom and China reached after the reciprocal tariffs were imposed.
The market’s reaction is telling. Last night, as the news broke, futures for all three major stock indexes were up more than 1%.
But today, with details emerging about Trump’s challenge, not to mention the questions this raises for trade, those gains have pulled back sharply. The Dow is currently negative while the S&P is basically flat.
As we’re going to press, news is breaking that a federal appeals court is allowing the tariffs to temporarily stay in effect. We’ll have to bring you more on this tomorrow.
The second piece of news from yesterday is Nvidia’s earnings
Nvidia remains the AI King.
The AI juggernaut reported better-than-expected quarterly results highlighted by another quarter of record-breaking sales – and that was despite the drag of restrictions on sales to China.
Here are details from the WSJ:
Revenue reached $44.06 billion for its fiscal first quarter, a 69% increase that was curtailed by Washington’s new limits on China chip sales.
The company was unable to ship $2.5 billion of its H20 processors and projected $8 billion in lost revenue for the current quarter due to the policy.
Looking forward, China remains a wildcard issue for Nvidia’s financial performance. CEO Jensen Huang spoke to this in his earnings call, saying:
With half of the world’s AI researchers based there, the platform that wins China is positioned to lead globally.
I suspect Huang is reading the news of the federal court’s ruling on Trump’s tariff executive orders with great interest.
For more analysis, let’s go to legendary investor Louis Navellier in his Accelerated Profits Flash Alert this morning:
Well, folks, [based on Nvidia’s earnings] I am sure you now understand why I like it…
You can hold NVIDIA to the end of the decade. The reason is their monopoly on regenerative AI chips is going to continue.
No one competes with their Blackwell chip.
After diving into details of the earnings report, Louis pivoted to the big write-down from the banned sale of H20 chips to China:
Despite that setback, NVIDIA is still blowing it out of the park. And they have explosive growth in multiple business divisions.
Louis points toward quantum computing, AI data centers, and the self-driving automotive industry.
Stepping back, Nvidia’s earnings only reinforce the message we’ve been hammering on in recent Digests…
AI is the most transformative and disruptive leap forward in human history. And with that disruption comes massive opportunity: a historic transfer of wealth to those who recognize the scale and speed of what’s unfolding.
By the way, this morning, our Editor-in-Chief and fellow Digest writer, Luis Hernandez sat down with Louis to discuss the court’s blocking of President Trump’s tariffs… concerns over federal spending… and Nvidia’s earnings report.
Just click here or on the play button below for the interview.
As Luis mentioned in the video above, here’s that link for Louis’ Accelerated Profits service.
In this video, Louis explains how he uses his proprietary quantitative stock grading system to find stocks that are making short-term moves to the upside so you don’t have to endure the constant market swings.
At Accelerated Profits, Louis usually issues at least two new buys every month, and every Tuesday he identifies his Top 3 stocks to buy right now. So, when you join, you’ll see Louis’ latest favorite picks today… and then get them every Tuesday going forward.
Right now, Accelerated Profits subscribers also get two brand-new special reports: his Liberation Day 2.0 Playbook: Three Stocks Set to Soar in Trump’s New Economy, as well as Liberation Day Losers: 10 Stocks to Avoid in the Coming Trade Wars.
Here’s that link again for more information.
Returning to the trade war (and, by extension, Nvidia’s ability to sell chips in China), what if Trump wins his appeal?
Well, a growing number of market participants would likely shrug and just say…
TACO.
Yesterday, MarketWatch ran a story titled:
“The ‘Trump always chickens out’ trade is the talk of Wall Street. Here’s one way to play it.”
The idea – now with its own acronym, “TACO” – holds that, for all Trump’s threats, he will always shy away from stratospheric tariff rates that kneecap the economy. And that means it’s time to position yourself for the eventual “official” end of this trade war.
Our hypergrowth expert Luke Lango shares this TACO opinion. So, even if Trump’s ability to impose tariffs is restored, Luke believes it’s no longer a massive market overhang.
Let’s jump to Luke’s Daily Notes in Innovation Investor:
It’s now crystal clear that this is the playbook: Trump throws a tariff tantrum, foreign leaders scramble, everyone talks, nobody actually gets nuked economically, deals get done, tariffs go down, and stocks move higher.
The trade war is in the rearview mirror. It’s not a risk. It’s a rerun.
The S&P 500, Nasdaq, and Dow are all right back to where they were before the trade drama started. And that makes sense. Because the trade drama isn’t a war — it’s a Netflix political thriller with low stakes and high ratings.
So, let’s stop watching the trade drama reruns. That season’s over.
Ignore the noise. Trust the trend. And remember the acronym: T.A.C.O.
So, what “season” does Luke suggest investors should tune into?
No surprises here – breakthrough tech.
Luke points to quantum computing, nuclear energy (powering AI), AI infrastructure, and eVTOLs (electric vertical takeoff and landing aircraft) as examples of where he’s looking for winners today.
Back to Luke:
While trade headlines suck all the oxygen, real innovation is exploding in the background.
What’s next is the age of breakthrough tech. And we’re here for it.
For more of Luke’s analysis and his leading next-gen tech recommendations in Innovation Investor, click here to learn more.
What do all these tech-related technologies have in common?
They must be powered (or do the powering).
Circling back to Louis, this is why he believes a smart “AI” play involves AI energy infrastructure.
From Louis:
Artificial intelligence will continue to gobble up ever more electricity this year. Here’s why I’m so confident:
Last November, NVIDIA Corporation (NVDA) released its Blackwell chip, an AI platform that’s 3X to 4X faster than its predecessor. It’s also a power hog, with each B200 GPU unit consuming 1,200 watts, roughly what a household toaster needs. (Its predecessor used 700 watts.)
However, this 70% increase in power consumption doesn’t translate to 70% more electricity demand overnight. Blackwell chips can only be produced so quickly, and even the top cloud computing firms like Oracle Corporation (ORCL) and Microsoft Corporation (MSFT) have been forced to wait in line for supply.
More Blackwell chips are on the way, and Nvidia’s older chips will be replaced by these newer, power-hungry chips. Louis goes on to note…
More of these chips means more power will be consumed, straining an already tight U.S. energy grid further.
This paves the way for a new wave of gains for top-tier energy infrastructure stocks.
For more color on this, and that tight energy grid, let’s rewind to Louis from last summer:
What AI is doing to our power grid is scary because we don’t have enough power.
I go between Florida and Reno. In Reno, we have diesel generators every mile in our neighborhoods because the power grid can’t handle the air conditioning load…
You can’t add a new natural gas power plant because the Biden administration passed this law recently that you must sequester the carbon, and that’s an eight-year permit. So, energy is a nightmare in America now.
And so, the companies that are building the grids, as well as better software, are the place to be.
For Louis’ infrastructure plays, in the past, he’s highlighted EMCOR, Eaton, and Quanta Services.
Louis’ Growth Investor subscribers are still in their Quanta position. They’re up 196% as I write.
If you haven’t taken advantage of this opportunity, you’re not too late
Yesterday, Louis held his “Liberation Day 2.0” summit. This is Louis’ name for a series of new “Liberation Day”-style moves from President Trump with radical implications for taxes, domestic energy, and technology.
“Domestic energy and technology” puts AI energy infrastructure and power generation plays directly in the crosshairs.
Zeroing in on “power generation,” here’s Louis:
On Friday, President Trump signed a series of executive orders with the goal of “re-establishing the United States as the global leader in nuclear energy.”
The orders slash regulations, with the aim to increase American nuclear energy capacity from 100 gigawatts to 400GW by 2050 and to “have 10 new large reactors with complete designs under construction by 2030.”
Nuclear stocks jumped on the news… but they still have plenty of room to run as AI’s need for power continues to soar. One of my favorite nuclear stocks at the moment is Vistra Corp. (VST).
It rates a “B” in my Stock Grader system, and I recommend it in several of my paid services. Investors curious about nuclear energy “liberation” should take a closer look at VST.
This isn’t the only stock that Louis likes based on Trump’s Liberation Day 2.0 policies.
In the free replay of yesterday’s event, Louis details the three sectors he expects to dominate during the next phase of Trump 2.0 – and a top-ranked “buy” pick for each sector.
He also highlights the sectors he’s worried will suffer the most as we transition to the new Trump economy – and 10 stocks that he and his Stock Grader system say you should avoid and/or sell now.
You can catch that free replay for a limited time right here.
We’ll keep you updated on all these stories here in the Digest.
Have a good evening,
Jeff Remsburg
