What One Hot Stock Can Teach You About Staying Invested

When Nvidia shares dropped over 40% earlier this year, many investors sold their holdings.

Now that the stock is back at all-time highs, longtime market commentator Jim Cramer is publicly questioning the actions of those who bailed, according to TheStreet.

TheStreet reports that he specifically pointed to billionaire investors who sold during the downturn, decisions that now look poorly timed in hindsight.

For everyday investors, the bigger takeaway might be this: What are your options when a stock like Nvidia makes headlines for a dramatic rebound?

FOMO can cloud good decisions

TheStreet reports the company’s revenue climbed from $27 billion in 2022 to $130 billion in 2024.

In just the first quarter of 2025, Nvidia brought in $44 billion in revenue — a 69% year-over-year increase, according to TheStreet. That kind of growth can make those on the sidelines feel like they’ve missed out.

Still, historical trends suggest that major returns often go to those who invest early and ride out volatility. TheStreet notes that investors in companies like Microsoft, Amazon, and Nvidia have generally seen the best outcomes when they stick with their positions during difficult stretches, rather than chasing highs after strong rallies. If you are uncertain and have over $100,000 in savings, getting free financial advice from SmartAsset may be a good idea.

If you already own Nvidia

Those who already own Nvidia may want to take a fresh look at their portfolios. If the stock has grown into an outsized position, some investors consider trimming to reduce exposure while keeping a core holding intact.

TheStreet reports that Nvidia’s surge has been driven in part by strong demand for high-end chips like the $30,000 B100 and the GB200 Superchip, which can cost over $60,000.

No stock moves in a straight line, and Nvidia has already experienced major swings this year. For those who remain invested, it may be wise to prepare for continued volatility and review your long-term strategy rather than react to short-term price moves.

If you’re still watching

For investors who missed Nvidia’s climb, deciding whether to buy now can be tricky. One strategy some use in situations like this is dollar-cost averaging — investing a fixed amount at regular intervals to reduce timing risk.

This method spreads out the purchase and avoids putting a lump sum into the market at a potentially high point.

Another option involves looking at diversified tech or AI-focused ETFs. TheStreet reports that companies like Meta, Microsoft, Amazon, and Google collectively spent $192 billion last year upgrading infrastructure to support AI.

Funds that include a mix of these names may offer a way to participate in the broader trend while managing company-specific risk.

Balancing your overall exposure

Individual stocks like Nvidia can deliver big gains, but they can also add volatility. Some investors choose to keep such holdings within a broader strategy that includes diversified funds, sector-based allocations, and a small portion set aside for higher-risk opportunities.

TheStreet notes that Nvidia’s rise is closely tied to the AI buildout — but no company is immune to setbacks.

A diversified portfolio can help protect against surprises while still allowing exposure to fast-growing sectors.

Build a strategy that fits your comfort level

One useful step is to review how much each investment represents within your portfolio. If any single stock has become too large, rebalancing can help reduce risk.

For those interested in Nvidia’s story, it might make sense to set aside a small speculation fund. This is money you feel comfortable using for higher-risk picks without affecting your core holdings.

Creating a consistent investment plan, whether through index funds or thematic ETFs, can also remove guesswork and help you avoid emotional decisions.

TheStreet points out that Nvidia’s biggest gains came after a steep decline, but not every investor is comfortable with that level of volatility.

The most important factor is not catching every rally. It is having a plan you can stick to as markets change.