Nigel Green, CEO of deVere Group, has said that the sudden decline in NVIDIA’s stock shows that Wall Street has an over reliance on the company, and a small group of other leading players in the AI marketplace.
There is no denying the fact that NVIDIA is the jewel in the AI crown, but when its stock fell it send the Nasdaq down by 1.4% in what was one of its sharpest drops since April.
NVIDIA became the first company to surpass $4 trillion in market capitalisation, and it’s growth over the last number of years has been at a supersonic level.
However, Green, who is the CEO of global financial advisory behemoth deVere Group has said the recent nosedive of NVIDIA’s stock serves as a warning to investors who are guilty of over-investing into the same small group of companies that are powering the AI revolution, and believes they have to broaden their investment portfolios when it comes to AI.
“Nvidia is at the heart of one of the most profound technological shifts in decades. Belief in its long-term importance is justified. But when one company falters and it reverberates through every corner of the market, it shows how dangerously narrow this rally has become.”
The Nasdaq 100 is now trading at 27 times expected earnings, underscoring valuations stretched to levels not seen since the dot-com boom.
Wall Street’s reliance on the Magnificent Seven has powered the rally, but it has also concentrated risk to a degree rarely witnessed in modern markets.
“The AI revolution is not confined to one stock or even a small group of them. Investors need to broaden their perspective and capture the wider AI ecosystem. This means looking at companies building data infrastructure, cybersecurity frameworks, cloud capacity, and industries embedding AI into healthcare, finance, and manufacturing. The future of AI is multi-dimensional, and portfolios need to reflect that reality.”
The timing of Nvidia’s slide coincides with heightened focus on monetary policy.
Traders are betting on a September rate cut and at least one more before year-end, while Fed Chair Jerome Powell prepares to speak at Jackson Hole.
Yet inflation remains unpredictable, labour market data has softened, and tariff-led costs continue to add pressure.
“Markets are behaving as though rate cuts are guaranteed and smooth. If Powell pushes back, or if inflation spikes again, investors who are narrowly positioned will find themselves doubly exposed. Concentration risk layered on top of policy mispricing is a dangerous cocktail.”
Beyond the Fed, geopolitical uncertainty is shaping market mood. President Donald Trump has intensified calls for a peace deal between Russia and Ukraine, raising hopes for dialogue but leaving critical issues unresolved. These crosscurrents have the potential to unsettle commodities, currencies, and equities alike.
“The reality is that global markets are moving too fast and are too interconnected to rely on one theme or one region. AI remains the growth engine of this era, but investors must approach it with nuance. Diversification across geographies, sectors, and asset classes is the only effective way to participate in the upside without being blindsided by sudden shocks.
Green did stress that volatility is not a strong enough reason to walk away from AI, but did urge investors to engage with it more intelligently.
“Those who expand their positioning into the broader ecosystem, while ensuring they are not overexposed to a handful of megacaps, will be far better placed to capture the long-term rewards. AI will continue to drive productivity, innovation, and wealth creation across the global economy. But the winners will not be limited to a small cluster of companies. This is the moment for investors to widen the lens, strengthen diversification, and prepare for the next wave of growth.”
