Nvidia holds record share of S&P 500
The chipmaker’s stock has soared since 2022, yet analysts warn that China tensions, power limits, and new rivals could threaten future growth.
Nvidia now accounts for more than 8% of the S&P 500, the largest share ever held by a single stock since records began in 1981. The company’s market value reached about $4.5 trillion on Monday, driven by unprecedented demand for its AI chips.
While investor sentiment remains strong, analysts warn of mounting risks. Political tensions with China, potential export restrictions, and reliance on overseas resellers could threaten sales.
Over the weekend, reports emerged of an agreement with the US government allowing Nvidia and AMD to give 15% of Chinese chip revenue in exchange for export licences, potentially boosting growth by more than 20%.
Infrastructure is another concern. Analysts say customers now face delays from chip shortages, limited power grid capacity, and data centre cooling systems.
Some of Nvidia’s biggest clients could become direct rivals, challenging its 75% profit margin and long-term dominance in AI infrastructure.
Nvidia’s unprecedented weight in the S&P 500 closely ties the index’s performance to its fortunes. While demand for AI hardware remains high, the company’s growth trajectory depends on navigating political, infrastructure, and competitive pressures.
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