If you own stock in Nvidia, you\u2019re likely feeling pretty good about the company\u2019s performance in 2025.<\/p>\n
The tech giant\u2019s stock has been on an incredible run, climbing more than 50% year to date. In fact, its record-setting performance in 2025 launched Nvidia into unchartered territory, as it became the first company ever to reach a market value of $5 trillion (1).<\/p>\n
Nvidia, which was founded in 1993, got its start by designing and manufacturing graphics processing units, which are also known as GPUs. These electronic chips allow for parallel processing, which means they can handle high-demand computing tasks such as gaming.<\/p>\n
This meant the California-based company was well positioned when ChatGPT\u2019s 2022 debut fueled feverish interest in generative artificial intelligence and sparked a massive AI investment boom.<\/p>\n
Since then, tech stocks have become a very popular investment on Wall Street. And while some individual investors may feel compelled to get in on the tech rush \u2014 or maybe even increase their tech investment \u2014 Washington Post columnist Michelle Singletary warns against chasing the latest AI trend because of Nvidia\u2019s \u201cepic run.\u201d<\/p>\n
\u201cDon\u2019t let your widespread enthusiasm for this stock or any other AI company distract you from the most proven way to succeed as an investor: staying diversified,\u201d Singletary writes (2).<\/p>\n
While AI companies have made stunning gains in 2025, this development has fueled concerns about an AI-driven stock market bubble. Some fear this potential bubble will inevitably burst, which could lead to a stock market crash or even a recession, similar to the dot-com bubble burst of 2000.<\/p>\n
Callie Cox, chief market strategist for Ritholtz Wealth Management, shared some advice with Singletary on how to approach investing in tech.<\/p>\n
\u201cIf you find yourself feeling FOMO (fear of missing out), it\u2019s good to first identify how much tech you already own. You may be surprised by how tech-heavy your portfolio already is,\u201d said Cox, who notes that the Magnificent Seven stocks \u2014 Amazon, Microsoft, Alphabet, Meta Platforms, Apple, Tesla and Nvidia \u2014 currently make up more than one-third of the S&P 500\u2019s market value.<\/p>\n
As Cox notes, if you\u2019re invested in an exchange-traded fund<\/a> such as the S&P 500, you\u2019re likely more invested in tech than you think. And while that doesn\u2019t mean that you shouldn\u2019t invest more money in tech, betting heavily on the AI gold rush has the potential to backfire.<\/p>\n Nvidia investors got a potential warning back in January, 2025, when the rollout of DeepSeek \u2014 a Chinese AI app that rivals ChatGPT but with much lower development costs \u2014 sent Nvidia stock tumbling 17% (though it has since recovered).<\/p>\n \u201cInvestors may like tech stocks on good days, but they can\u2019t handle the smoke on the bad days,\u201d said Cox. \u201cThis is why you spread your money across sectors and geographies instead of going all in on what stocks you think will continue to do well. That\u2019s a bet on the future, and nobody can predict the future.\u201d<\/p>\n Trending: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B<\/a> \u2014 start using them today to get rich (and then stay rich)<\/p>\n While some investors may be counting on a huge windfall from an outperforming asset like Nvidia stock, most financial professionals recommend keeping your portfolio diversified and staying disciplined in your investment approach.<\/p>\n \u201cYou want to build a portfolio you can stick to in thick and thin,\u201d said Cox. \u201cFor that, you need to prioritize stability and consistency so you\u2019re not making rash decisions at turning points for the stock market and the economy.\u201d<\/p>\n In other words, holding different asset classes means you\u2019re better positioned to weather market downturns and geopolitical events. That way if one stock that you own drops in value, you\u2019re not left completely vulnerable.<\/p>\n Diversification could involve holding cash savings, high-quality bonds and potentially alternative assets, in addition to equities. You can also diversify your stocks and corporate bonds among different sectors, and different companies within those sectors. For instance, energy stocks outperformed when the dot-com bubble burst in 2000 and again during the global financial crisis in 2008 (4).<\/p>\n Those who were all-in on tech stocks lost much of their wealth in the early 2000s, but even then, some tech companies like Amazon survived and went on to thrive.<\/p>\n Of course, diversifying doesn\u2019t mean avoiding AI or tech altogether. In addition to tech, consider other sectors that might not be as attractive, but \u2014 with a little patience \u2014 can build a solid nest egg over time.<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n CNBC (1<\/a>); The Washington Post (2<\/a>); CBS News (3<\/a>); Alliance Bernstein (4<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"If you own stock in Nvidia, you\u2019re likely feeling pretty good about the company\u2019s performance in 2025. 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