Nvidia stock continues to impress with growth potential, but concerns remain about valuation and competition.

From Nasdaq: 2024-12-10 07:15:00

Nvidia (NASDAQ: NVDA) continues to impress with a year-to-date gain of 180%, sparking expectations for more growth in 2025. Concerns linger about slowing growth, valuation, and increased competition. ETFs, like those from Vanguard, offer exposure to Nvidia while maintaining diversification, with some holding a significant percentage of Nvidia stock.

Nvidia’s size now makes up a significant portion of the S&P 500, with the Vanguard S&P 500 ETF having a 6.8% weighting in Nvidia. Other Vanguard ETFs, like the Vanguard Information Technology ETF, provide exposure to tech stocks, including Nvidia. However, there are risks to consider regarding concentration in certain sectors and companies.

Investors looking for high exposure to Nvidia and other megacap growth stocks may find the Vanguard Mega Cap Growth ETF appealing, despite its concentration in a handful of names. Other Vanguard ETFs offer more diversification and exposure to a wider range of growth stocks, with varying levels of concentration in top holdings.

While low-cost ETFs can be effective for investing in companies like Nvidia, high concentrations in similar types of companies can lead to volatility. Investors should weigh the risks and benefits of investing in ETFs heavily exposed to Nvidia, particularly considering potential impacts of downturns in key customer industries.

The Motley Fool Stock Advisor team has identified 10 best stocks for investors to buy now, with Nvidia not making the list. Investors considering Nvidia should weigh the potential for high returns against the risks associated with concentrated exposure to the company. Stock Advisor offers guidance on portfolio building and regular updates to help investors navigate the market.



Read more at Nasdaq: Want to Buy Nvidia Stock Before the End of the Year? Consider These 7 Magnificent Nvidia-Heavy Vanguard ETFs.