How to Diversify a Concentrated NVIDIA Stock Position

NVIDIA’s board opened an investigation into CEO Jensen Huang on November 8, 2026, and the stock fell more than 4% on the news. Whatever comes of it, the headlines are a reminder of something that’s true of any single stock: one event you can’t control can move a big part of your net worth in a day.

If NVDA has grown into a large share of your portfolio, through RSUs, an ESPP or simply a great run, here are your options for diversifying.

First, Know What You Own

Before choosing a strategy, get clear on the details. How many shares do you hold, and in which accounts? What’s your cost basis on each lot? Which lots are long-term (held more than a year) and which are short-term? If you work at NVIDIA, what’s unvested, and when are your trading windows?

Different lots can have very different tax costs. Shares from a recent RSU vest may have a basis close to today’s price, so selling them costs little in tax. Shares bought years ago may be almost entirely gain.

Option 1: Sell and Pay the Tax

The simplest option is often the right one. Long-term gains (on shares held more than a year) are taxed federally at 0%, 15% or 20%, depending on your income. Above $200,000 of income for single filers or $250,000 for married couples, the 3.8% net investment income tax applies on top. Short-term gains are taxed as ordinary income, at up to 37%.

New Jersey doesn’t have a lower rate for capital gains. They’re taxed as ordinary income, at rates up to 10.75%. For a high earner in Hoboken, that can put the all-in rate on a long-term gain above 30%.

It’s easy to let the tax bill decide for you. But consider the math. If you have $500,000 of gain and pay roughly 30% in tax, you keep about $350,000 to reinvest. If you hold and the stock drops 30%, you’ve lost a similar amount, and you still owe tax on whatever gain is left when you eventually sell. A tax bill is a known cost. A drawdown in a single stock is not.

If some of your shares are short-term, it can be worth waiting until they cross the one-year mark before selling, as long as you’re comfortable with the risk in the meantime.

Option 2: Sell Gradually

You don’t have to do it all at once. Selling on a set schedule, for example a fixed number of shares each quarter over two or three years, is one of the most common ways to reduce a large position.

Spreading sales across tax years can keep more of your gain in a lower bracket. Selling $1 million of gain in one year may push all of it into the 20% bracket plus the 3.8% surtax. Spread over three or four years, more of it may be taxed at 15%, especially in a year with lower income, such as a sabbatical, career change or early retirement.

A schedule also takes emotion out of it. You don’t have to decide whether today is the right day to sell, and you won’t be tempted to react to every headline, in either direction. Some people add simple rules, such as selling extra shares if the price rises above a set level.

The tradeoff is that you stay exposed to the stock while you sell down. The longer the schedule, the more risk you carry along the way.

Option 3: Stop Adding to the Position

For NVIDIA employees, concentration usually grows quietly with every vest. Each new RSU tranche adds more shares, and if you never sell, the position keeps getting bigger.

RSUs are taxed as ordinary income when they vest, based on the share price that day. That price becomes your cost basis, so selling right away usually creates little or no additional tax. Holding vested RSUs is the same decision as taking that cash as a bonus and using it to buy NVIDIA stock. Ask yourself if you’d do that.

Also check your withholding. Companies typically withhold federal tax on RSUs at a flat 22% (37% above $1 million of supplemental wages). If you’re in a higher bracket, you may owe more in April, and selling some shares at vest can cover it.

If you participate in the ESPP, the discount is valuable, and selling shares soon after purchase locks it in. Holding them for a qualifying disposition (two years from the offering date and one year from purchase) can lower the tax, but it also means holding more of the same stock for longer.

Option 4: Donate Appreciated Shares

If you give to charity, donating NVIDIA shares you’ve held for more than a year, instead of cash, can be one of the most tax-efficient moves available. The charity sells the shares tax-free, you avoid the capital gains tax, and you may be able to deduct the full market value.

For example, if you donate shares worth $50,000 that you bought for $5,000, you can generally deduct $50,000 and never pay tax on the $45,000 gain. Deductions for donated stock are generally limited to 30% of your adjusted gross income, with any excess carried forward for up to five years.

A donor-advised fund lets you contribute a larger block of shares in one year, take the deduction then, and recommend grants to charities over time. That can be especially useful in a high-income year, such as a large vest or a year you sell a lot of stock.

For larger positions, a charitable remainder trust can sell your shares without immediate capital gains tax, reinvest the full amount in a diversified portfolio, and pay you an income stream for years or for life. Whatever remains at the end goes to charity.

Option 5: Diversify Around It

Your NVIDIA exposure probably isn’t limited to the shares you hold directly. NVIDIA is one of the largest companies in the S&P 500, and it’s an even bigger weight in many tech and growth funds. Add it all up across your 401(k), brokerage accounts and funds to see your true exposure.

As you add new money, you can direct it toward investments that hold little or no NVIDIA, such as other sectors, international stocks, bonds or funds that exclude semiconductors. Your overall concentration falls over time even if you don’t sell a share.

Direct indexing takes this a step further. Instead of buying an index fund, you own the individual stocks in the index, minus NVIDIA and other companies tied to your job or industry. Because you own each stock separately, losers can be sold to harvest losses, which can then offset gains when you do sell NVIDIA shares.

If You Work at NVIDIA

Your income, your unvested equity and your investments are all tied to the same company. That’s the concentration that matters most.

Trading windows and company policies limit when and how you can sell. A Rule 10b5-1 plan sets up sales in advance on a fixed schedule, so you can keep selling even when the window is closed.

Pick a Target, Then a Plan

Most people don’t need to sell everything. Many decide on a target, such as no more than 10% to 15% of their net worth in a single stock, and then combine a few of these strategies to get there over time.

The right mix depends on your cost basis, tax bracket, charitable goals and how much risk you can afford to carry. If you’re holding a large NVIDIA position and want to work out a plan, let’s talk.

Michael Walstedt is a fee-only financial advisor and founder of Reliant Wealth Advisory, based in Hoboken, NJ. This article is for general informational purposes and may not apply to every individual situation. If this is a question you’re actively considering, a personalized conversation can often bring clarity.