Nvidia’s stock is on an ‘epic run,’ but chasing the AI trend could be dangerous. How to safeguard your tech investments

If you own stock in Nvidia, you’re likely feeling pretty good about the company’s performance in 2025.

The tech giant’s 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).

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.

This meant the California-based company was well positioned when ChatGPT’s 2022 debut fueled feverish interest in generative artificial intelligence and sparked a massive AI investment boom.

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 — or maybe even increase their tech investment — Washington Post columnist Michelle Singletary warns against chasing the latest AI trend because of Nvidia’s “epic run.”

“Don’t 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,” Singletary writes (2).

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.

Callie Cox, chief market strategist for Ritholtz Wealth Management, shared some advice with Singletary on how to approach investing in tech.

“If you find yourself feeling FOMO (fear of missing out), it’s good to first identify how much tech you already own. You may be surprised by how tech-heavy your portfolio already is,” said Cox, who notes that the Magnificent Seven stocks — Amazon, Microsoft, Alphabet, Meta Platforms, Apple, Tesla and Nvidia — currently make up more than one-third of the S&P 500’s market value.

As Cox notes, if you’re invested in an exchange-traded fund such as the S&P 500, you’re likely more invested in tech than you think. And while that doesn’t mean that you shouldn’t invest more money in tech, betting heavily on the AI gold rush has the potential to backfire.

Nvidia investors got a potential warning back in January, 2025, when the rollout of DeepSeek — a Chinese AI app that rivals ChatGPT but with much lower development costs — sent Nvidia stock tumbling 17% (though it has since recovered).

“Investors may like tech stocks on good days, but they can’t handle the smoke on the bad days,” said Cox. “This 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’s a bet on the future, and nobody can predict the future.”

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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.

“You want to build a portfolio you can stick to in thick and thin,” said Cox. “For that, you need to prioritize stability and consistency so you’re not making rash decisions at turning points for the stock market and the economy.”

In other words, holding different asset classes means you’re better positioned to weather market downturns and geopolitical events. That way if one stock that you own drops in value, you’re not left completely vulnerable.

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).

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.

Of course, diversifying doesn’t mean avoiding AI or tech altogether. In addition to tech, consider other sectors that might not be as attractive, but — with a little patience — can build a solid nest egg over time.

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CNBC (1); The Washington Post (2); CBS News (3); Alliance Bernstein (4)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.