2025 saw a sharp recovery in several growth stocks after April 4, 2025, when Trump’s tariffs on global trade partners first resurfaced. The next major tariff announcement came in August, as the U.S. government allowed Nvidia and Advanced Micro Devices (AMD) to sell chips to China in exchange for a 15% share in revenue from China. Trump tariffs are not new for North America.
Once the first round of tariffs was over and many companies faced a substantial tariff bill, their management deployed strategies to address the issue through negotiation, supply chain adjustments, and cost-cutting measures. While tariff volatility will persist throughout 2025 and beyond, growth won’t stop.
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A magnificent stock that could make you richer even in this chaos
As the saying goes, “when the going gets tough, the tough get going.” The current scenario of trade war, geopolitical uncertainties, and a global shift in the supply chain has paused many big trade decisions.
In the chaos of tariff uncertainty lies an opportunity for supply chain management solutions.
Let’s put ourselves in the shoes of an exporter and see how they are dealing with tariffs. When the additional cost of the tariff is eroding your profits, you start to look for alternative sources of revenue and/or supplies. You increase exposure to revenue sources where tariffs are avoidable. Where a tariff is unavoidable, you cut costs or delay exports unless you have assured sales or the client agrees to absorb some portion of the cost.
Nvidia and AMD used the latter strategy to negotiate a deal with Trump. They agreed to pay 15% of their revenue from China to the US government in return for allowing the export of advanced artificial intelligence (AI) chips. They could afford to do so as data centre AI chips have a high margin, and sales of these chips are assured in China. This sent AMD and Nvidia stock soaring. It is too late to buy these stocks, as Chinese authorities are asking local firms not to use Nvidia chips, as reported by Reuters.
One stock you could consider buying in the tariff chaos is Descartes Systems (TSX: DSG).
Descartes Systems
Just like Nvidia and AMD, other companies are finding a way around tariffs. This supply chain adjustment needs the solutions Descartes Systems offers. Its trade intelligence and customs compliance offerings, mixed with its Global Logistics Network, facilitate exporters and importers adjusting to the change.
The company’s share price dipped 12% on June 4 as it announced cost reduction measures in its first-quarter earnings. It slashed its workforce by 7% only to maintain its 45% adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin amidst slowing trade volumes. While the stock recovered 11% in the second half of July over hopes of successful trade negotiations and a reduction in tariffs, the tariff shocks on August 5 sent the stock down almost 8%.
Descartes is significantly affected by the trade war, as a reduction in trade volumes could slow its revenue growth. But a contrarian view is that the dip presents a buying opportunity. Because when the tariff tensions ease, there will be a significant surge in trading activity as all pent-up trade is processed. Descartes is prepared to handle that scale. In the meantime, its zero debt and $59.7 million cash reserve can help it thrive in the slow business environment.
In the last two months, the company acquired inventory management firm Flare Inventory and final-mile delivery optimization solutions firm PackageRoute. This will help it stay relevant to address customers’ pain points.
How can this stock make you richer in 2025 and beyond?
Unlike traditional software-as-a-service companies that rely on annual recurring revenue, Descartes gives clients the flexibility to choose one or two services for a single consignment or opt for an end-to-end solution depending on their needs. It not only helps international trade, but also e-commerce trade. When trade volumes surge, the scale of operations helps increase net margins faster than revenue.
Now is a good time to buy the stock before e-commerce volumes pick up in November. You could see a recovery rally this year, followed by a growth rally beyond 2025.
