Nvidia has become one of the top five companies—alongside Microsoft, Apple, Alphabet and Amazon—accounting for almost 30% of the S&P 500’s market capitalization. This concentration has helped propel the index toward record highs but also raises concerns about an even larger impact if Nvidia’s share price falters.

The company’s AI-driven growth has pushed its shares to peak valuation multiples, prompting warnings that its current price assumes uninterrupted perfect performance. High-flying stocks often stall when expectations outpace actual earnings, and Nvidia may be vulnerable to any slowdown in AI spending or margin pressure.

While some money managers caution that elevated valuations could lead to a market correction, others note that large-cap tech stocks can remain overvalued for extended periods. Divergent views underscore the uncertainty over whether Nvidia’s momentum can continue or if a shift in investor sentiment will trigger a broader pullback.