Tariff-Proof Your Portfolio With This Hidden AI Sector

Last week, the U.S. Supreme Court threw a monkey wrench straight into the gears of the Trump administration’s tariff machine.

In a single decision, the court ruled that the President doesn’t have unilateral authority under the International Emergency Economic Powers Act to impose sweeping tariffs.

In simple terms, the High Court said Congress – not the White House – controls taxes and import duties. The ruling effectively gutted much of the tariff regime President Trump relied on over the past year.

If you think this means the trade war is over, you’re mistaken.

While the ruling invalidates nearly $160 billion in previously collected tariffs, the White House has already pivoted to a new 15% global tariff under different trade laws.

And the market reacted exactly how you’d expect: with volatility.

Since last Friday’s ruling, the S&P 500 has been up as much as 2.1% and now down 1.4%. Over the two months preceding the ruling, investors have pulled $52 billion out of U.S. equity products.

Now, I’m no constitutional lawyer. So, I don’t know how many tariff cards the administration has left to play.

But I do know this: When tariff talk heats up, some businesses feel the shockwaves far more than others.

In particular, I believe artificial intelligence (AI) chipmakers like AMD and Nvidia could be in for a bumpy ride if tariff uncertainty doesn’t clear up soon.

These Silicon Valley giants design AI brains, but they depend on Taiwan to make the chips that power those brains… South Korea to produce the high bandwidth memory… And China to supply the rare earth minerals.

When tariffs rise, all of their input costs rise. When export controls tighten, their market shrinks overnight. This isn’t hypothetical, either. Both the Biden and Trump administrations restricted the export of advanced AI chips to China.

These AI chipmakers trade at an average 35x earnings. That means investors are willing to pay $35 for every $1 a company earns in a year. That’s 50% higher than the stocks in the Dow Jones Industrial Average, the blue-chip index.

Investors pay this premium because they expect relentless growth. If renewed tariffs cause demand to slow or margins to shrink, their stocks will reprice lower.

That’s why we’ve been hunting for a more profitable way to play the AI megatrend – one that lets us capitalize on the upside while staying insulated from the tariff chaos swirling around the chipmakers.