Nvidia’s Hidden Power in Your S&P 500 ETF: Why VOO Is More Exposed Than You Think

Nvidia drives over 20% of VOO’s 2025 gains. Discover how one stock wields outsized influence on S&P 500 ETFs — and what that means for investors.

Nvidia’s Outsized Role in S&P 500 ETFs

For most investors, Nvidia has quietly become the most important stock in their portfolio. In the Vanguard S&P 500 ETF (VOO), it holds an 8.1% weight. But its influence goes far beyond that number.

So far in 2025, Nvidia has contributed 2.4 percentage points to VOO’s 11% year-to-date return, accounting for 22% of the fund’s gain. That’s nearly three times what you’d expect from its weight alone.

Other Tech Giants Carrying the Market

Nvidia isn’t the only stock punching above its weight in the S&P 500:

- Microsoft (6.9% weight) → +1.4 points (≈13% of index gain)

- Meta & Broadcom (under 3% each) → +0.7 points apiece (≈6% each)

This marks the second year in a row that Nvidia has accounted for about a fifth of the S&P 500’s performance. In 2024, when it became the world’s most valuable company, it alone added 5.4 points to VOO’s 25.1% gain.

Why Nvidia Matters So Much

An S&P 500 stock’s impact depends on both weight and performance. A surging heavyweight can drive massive gains, while a stumble can pull the index lower. With Nvidia up 35% year-to-date (triple the market’s gain), its effect on ETFs like VOO is outsized.

Concentration Risks — and Rewards

The risks are real. Earlier in 2025, when trade-war fears dragged the S&P 500 down 15%, Nvidia accounted for 1.8 points of that loss. But avoiding big names hasn’t always paid off. The Invesco S&P 500 Equal Weight ETF (RSP), which reduces mega-cap exposure, has often underperformed.

There’s also an asymmetry:

- Upside: a giant winner like Nvidia can turbocharge returns.

- Downside: losses are capped by its weight (≈8%). Even a 50% drop would cut only about 4 points from the index — less than Nvidia added in 2024 alone.

What Investors Should Know

Investing in an S&P 500 ETF isn’t just broad diversification — it’s also a concentrated bet on the biggest companies, and Nvidia is currently at the center of that story. Whether it keeps climbing toward $10 trillion in market cap or cools off, Nvidia’s role in shaping returns will remain massive.

FAQs: Nvidia and S&P 500 ETFs

Q: How much does Nvidia affect S&P 500 ETFs like VOO?

A: Nvidia makes up about 8% of VOO’s weight, but in 2025 it has driven over 20% of the ETF’s total gain.

Q: What happens if Nvidia’s stock falls?

A: A 50% drop in Nvidia would likely cut around 4 points from the S&P 500 — meaningful, but not catastrophic.

Q: Are equal-weight ETFs safer from Nvidia risk?

A: Equal-weight ETFs like RSP reduce reliance on mega-caps but have historically underperformed when big tech stocks lead.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a licensed financial advisor before investing.