Here is the real world issue, if you are adequately diversified so that say NVDA is 2, 5, 105 of your port, then it is not a big deal. Long run (meaning course of many years, it probably goes higher, although the circuitous route it takes to get there is tbd), short run it probably stops running in the near to mid-term and has a traceback of a material amount. Could even be as far as 50%, although that type of drop is very unlikely given all NVDA has going for it.
So run the math, if NVDA were to fall say 25 or 30% tomorrow, would that unduly destroy your port?
If it were are you willing to stay with it when it recovers (although that could be years)?
You will see that the overall impact on your wealth will not be that great either way if you are well diversified. So practically speaking, stop fussing over it.
If you are not well diversified, and a potential 30% crash or greater is of real concern to you, even if you are confident that some day it will recover, then it becomes a very material issue to consider.
Remember how much money was lost in stocks like AOL and Iomega after enormous run ups. However, these losses were caused by disruptive technologies eating away at the disruptive markets that these companies had previously created.
NVDA is still in the nascent age of a new disruptive technology. No one is coming along to disrupt their technology, nor to make it obsolete, or yesterday’s news. This is cutting edge stuff. NVDA is at the cutting edge of enabling these new markets that take visual machine learning like autonomous driving. So I do not consider it something like AOL was when broadband swept in, or Iomega when USB cards or whatever made the scene.
If it keeps you up at night, given this, diversify from it (but remember those pesky taxes. I owe $17k from 2014 - had to sell something to pay other taxes…sucks yes, but reality.
Those are my two cents on the matter from a practical perspective because frankly no one knows how a stock will fluctuate, but we can figure out whether it is (a) a bubble - no, (b) subject to disruption - no, not now, (c) market maturing - again no.
As such, it is still a viable long-term investment. Doesn’t mean it will be a good one for awhile. So ask yourself how you would feel if it were cut 30% or more, even knowing the business has a long way to grow still.
Okay, with one exception, NVDA did lose out in the mobile GPU game, which is disruptive to desktop.
But nuff said. Keep it simple. Don’t over think it.
Tinker