AI bubble: The ‘world’s most important stock’ could shake your KiwiSaver this week
Wednesday, 19 November 2025
There’s an investment meme doing the rounds at the moment, showing a dilapidated building being propped up precariously by a series of three questionable beams.
The building, leaning heavily to its side, has been labelled “the entire market,” while the beams have been tagged Nvidia.
It’s a simple, but compelling indicator of how much is currently riding on this single stock, amid the explosion of interest in artificial intelligence in recent years.
The company will on Thursday morning report its quarterly earnings – a moment that can be described as the warrant of fitness for the AI economy.
If Nvidia’s numbers show cracks, problems or leaks, then the impact could reverberate across the globe.
It’s little surprise then that Craig's Investment Partners’ Mark Lister has described this as the most important stock in the world right now.
“Its fierce size makes it so important right now,” he tells me.
“It's such a big company now, in terms of its market value weighting in the big indices that everyone is exposed to it.”
Nvidia is currently worth US$4.6 trillion on the US market and accounts for approximately 8% of the total value of the S&P 500 (an index of the 500 biggest companies on the US stock exchange).
Analysts suggest, depending on the performance of the company, the stock price of Nvidia could swing around 7.5% in either direction. Good news, it goes up. Bad news, it goes down.
To put that into perspective, you’re talking about a US$345 billion swing in value, which is more than the listed value of all but 33 companies in the world.
No matter which way you look at it, Nvidia is the biggest deal in the world right now.
“Even if you're a well-diversified index investor, you've still got a hefty weighting to Nvidia,' says Lister, pointing out that the many Kiwi investors who have put money into index funds or KiwiSaver could take a hit if the company’s results land below expectations.
The impact on Nvidia also goes far wider than just one company. Because it has become a bellwether for AI, analysts see it as indicative of the uptake and demand for AI tech. If Nvidia isn’t hitting its targets, then this spells bad news for all the other companies pouring money into AI.
AS CMC Markets managing director Chris Smith explains: “They are the most in-demand supplier in the world with partnerships throughout all major industries. They are the Usain Bolt of the markets, with everyone expecting a world record result.”
What this means for KiwiSaver
Most KiwiSavers, particularly those invested in growth funds, will have exposure to the US market.
To understand the impact of Nvidia, you need to look at how big a deal AI is across the US market right now – and research shows it’s the hot ticket in town.
“In conference calls this earnings season from S&P500 companies, 47% of companies discussed AI specifically in the context of productivity and efficiency and 62% mentioned AI,” Smith says.
Recent conference updates from Nvidia suggest the company is already ahead of its forecast, but the proof will be in the numbers when they’re released on Thursday.
If Nvidia’s result comes in below those high expectations, we could start to see greater scrutiny of the AI claims and objectives outlined by other companies, which could lead to wider losses.
The short-term impact on KiwiSaver balances or index-fund investments could be quite large because of the impact Nvidia has on broader sentiment.
How long this impact lasts will depend on the circumstances that follow. Smith says perspective is always important when it comes to these things.
“Nvidia dropped 17% in a single day back in January 2025 when the market heard around deepseek from China. Many can’t remember this news event as the stock jumped 8% the next day and nearly doubled since then. Then in April, Nvidia dropped to as low as US$86 and has since recovered to near US$200. Volatility is part of investing and, in hindsight, can be seen as opportunities.”
The market is expensive right now
No matter where you look in the US market, stocks look very expensive right now.
Goldman Sachs strategists predicted last week that because US stocks have reached such highs, they will likely lag behind global peers over the next decade.
The team at the investment bank recommended that investors diversify beyond the US in that they anticipate the S&P 500 to deliver annual growth of 6.5%, well below the 10.9% projected for emerging markets.
At the moment, the benefits of AI are being well priced into US stocks, but all indications point to AI having broad-based applications around the world, which means emerging markets could, in the coming years, enjoy further growth as the tech starts to bed in properly.
Craig's Investment Partners’ Lister tells me we shouldn’t be afraid of the prospect of a correction in the market.
“You're going to get pullbacks, you're going to get sell-offs, and you're going to get corrections,” he says.
“The US markets are up 80-odd per cent over the last three years, and Nvidia has had a cracking run. People have done very well, and you've just got to appreciate that this isn’t going to happen forever in a consistent manner.'
Most KiwiSaver investors are also in the market over the long haul, which makes them buyers rather than sellers.
“You probably actually want a bit of weakness in Nvidia and all those other stocks,” says Lister.
“It's better for them if um, if things stumble a little bit.
“Why would you be rooting for all-time highs? As buyers, we should be rooting for another sell-off… I would love that, because I’m sitting here thinking: geez, I wish I had some more stocks, but they’re so expensive right now.”
It might sound counterintuitive for an investment expert to call for a sell-off, but the point Lister is actually making is that investment is a long-term game. In those moments when the market drops off, it presents you with an opportunity to buy some stocks at a discount, allowing you to make gains as they grow.
The aim here isn’t to try to time the market (this is a fool’s game), but rather to have a consistent approach to your portfolio, which sees you investing on a schedule. Over an extended period, this will enable you to buy at the troughs, giving you room for growth. If all your investments are just bought sporadically at the peak (often driven by FOMO), then your investments never get the opportunity to grow.
As nerves start to rise amid this AI bubble, the old investing adages start to ring even truer: diversify, don’t panic and remember it’s about time in the market rather than timing the market.