Nvidia accounts for a significant portion of the value of many popular indexes.
Artificial intelligence (AI) has been a key investment theme in the market for the past three years, and 2026 looks set to be no exception. Hyperscalers are still spending tens of billions of dollars to build data centers, making it a potentially big investment for companies to participate in building AI infrastructure.
However, driving the overall market higher requires companies with large weights in major indexes, and there are only a few stock candidates that can do that. The most obvious of these is Nvidia (NVDA 0.29%)And I think it will be able to almost single-handedly lead the market upward in 2026.
Even if your portfolio doesn’t have enough exposure to Nvidia, it’s not too late to buy. However, if you don’t want to invest in Nvidia separately, Nvidia is a large part of several popular indexes, so buying into a fund that tracks them would also add meaningful exposure. Nvidia has led the market in each of the past three years, and I think it’s likely to do the same in year four.
Image source: Getty Images.
Nvidia dominates the common index
Nvidia is a member of every U.S. broad market index that investors focus on. One is Dow Jones Industrial Average (^DJI 0.17%). We differ from our peers because we focus on price rather than market capitalization. Price weighting had its benefits 100 years ago, when it was easier to calculate the value of an index using a company’s stock price rather than its market capitalization, but it is now a bit outdated. Still, many investors still check the Dow Jones Industrial Average to gauge market and economic trends, as it is a select group of the nation’s 30 most important companies.
Nvidia’s stock price is not that high at about $185 per share. This means that it is only the 20th largest component of the index, accounting for approximately 2.3% of its weight. Although it is far from the largest component, goldman sachsaccounting for about 12% of the index. However, with only 30 companies included in the index, Nvidia remains a significant part.
Today’s changes
(-0.29%) $-0.54
current price
$186.51
Key data points
Market capitalization
$4.5 trillion
daily range
$186.30 -$190.43
52 week range
$86.62 -$212.19
volume
4.6M
average volume
183 million
gross profit
70.05%
dividend yield
0.02%
of S&P500 (^GSPC 0.06%) and Nasdaq-100 is a more investment grade index and has greater exposure to Nvidia.
Nvidia makes up about 7.2% of the S&P 500 and 8.8% of the Nasdaq 100. So if Nvidia does well, these indexes do well too. However, if NVIDIA has the potential to outperform the indexes overall, it may be worth adding additional stocks to these indexes. One of the most common ways to invest in the Nasdaq 100 is to buy an exchange-traded fund that tracks the Nasdaq 100. invesco QQQ (QQQ 0.08%).
But will you be able to buy NVIDIA in 2026?
Data center construction is progressing at a rapid pace
Nvidia is benefiting from huge spending on building new AI data centers. These data centers are home to vast numbers of graphics processing units (GPUs), providing processing power for training and running AI models. There are alternative computing solutions, but none with an ecosystem that rivals the one Nvidia has created. This makes the company a top dog in the AI accelerator space and a bellwether for trends in the AI industry as a whole.
Wall Street analysts expect sales to increase 50% in fiscal year 2027 (ending in January 2027). Few companies have achieved such impressive growth rates, and even fewer large-cap stocks.
However, this trend will not stop in 2026. NVIDIA and its peers are telling investors that the AI ramp-up will continue until at least 2030. NVIDIA itself says it expects global data center capital spending to reach $3 trillion to $4 trillion annually by 2030. This is significant growth, and if NVIDIA can maintain its market share, it will continue to lead the market well into 2026 and beyond.
I think Nvidia is well worth owning on its own, and investors should consider adding exposure to Nvidia stock beyond what they already have through their index funds.
