Nvidia, a Possible Return to China, and the “Hidden” Risks for Portfolios

Nvidia’s stock moved higher early Thursday, fueled by a fresh wave of rumors suggesting the tech giant is very close to restarting hardware sales in China. That prospect adds to an already impressive run, as the company has emerged as the undisputed leader of the Artificial Intelligence (AI) revolution—leveraging its position as the top supplier of graphics processing units (GPUs) for data centers.

Staggering historical returns

To understand the scale of Nvidia’s success, it’s enough to look at the historical data from recent years. The company has delivered unprecedented growth, becoming the standout name in AI infrastructure investing. If someone had invested $2,000 in Nvidia’s stock five years ago, today they would see the value of that investment exceed $28,000.

That represents a total return of around 1,320% as of January 5—an outcome that crushes the broader market. By comparison, the S&P 500 posted a total return of about 100% over the same period, a figure that looks modest next to Nvidia’s rally. Many now view AI-related technology as the next major structural trend in the global economy.

Financial performance and forward expectations

The company’s financial profile is just as striking as its share-price performance. Between the third quarter of 2021 and the third quarter of fiscal year 2026 (which ended on October 26), Nvidia’s revenue surged by 1,106%, driven by relentless demand for GPUs. Profitability has also remained exceptionally strong, with operating margins averaging roughly 44% over the past five years.

Analysts remain optimistic, forecasting revenue growth of 211% between fiscal years 2025 and 2028.

The trap of “unseen” concentration

Still, this dominance can create risks that often escape investors’ attention. Todd Sohn, an ETF strategist at Strategas Securities, has warned about the dangers of excessive concentration in mega-cap stocks. As he notes, many investors may own a much larger exposure to Nvidia than they realize—even if they believe they hold a fully diversified portfolio.

Speaking on the popular show “Stocks in Translation,” Sohn emphasized that many ETFs are now heavily weighted toward corporate giants such as Nvidia, creating a false sense of security through diversification. As we move through 2026, investors are being urged to watch for extreme swings in market sentiment and to closely monitor sector rotation, as the market attempts to balance the opportunities and risks the new year brings.