Nvidia's Stock Is Struggling, and That's Bad News for This High-Powered Nasdaq ETF

Investing in exchange-traded funds (ETFs) can be a good way to spread out your risk among many different stocks. But one thing you may have noticed is that many ETFs, especially ones with significant positions in tech, often have a lot of exposure to a single stock: Nvidia.

The chip giant is the most valuable company in the world, with a market cap in excess of $4 trillion. It's a leader in the artificial intelligence (AI) revolution. But it's down 11% thus far in 2026, and that's been bad news for one of the top ETFs on the Nasdaq: the Invesco QQQ Trust (NASDAQ: QQQ).

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The Invesco QQQ Trust has had a strong correlation with Nvidia's stock this year

For years, the Invesco QQQ Trust has been a good, go-to growth investment to hang on to, as it gives investors exposure to the Nasdaq-100, which is a collection of the largest 100 non-financial stocks on the Nasdaq exchange. And with the Nasdaq being home to many of the world's best growth stocks, it's been a terrific buy in recent years. Since 2023, it has more than doubled in value.

This year, however, there's a problem. Nvidia is the largest holding in the ETF, accounting for nearly 9% of its total portfolio. And its share price has been falling due to investor concerns about valuations and heavy tech spending. The Invesco QQQ Trust has declined along with it. There has been an undeniable correlation between the two assets this year, as is evident in the chart below.

QQQ data by YCharts

Nvidia isn't, of course, solely to blame here; tech stocks as a whole are struggling. But as the most valuable company and effectively the figurehead for AI these days, as Nvidia goes, so too do many top tech stocks and ETFs.

Is the Invesco ETF still a good investment for the long haul?

One of the inherent risks with investing in tech-heavy funds is that they will be more volatile than other ETFs, and they can experience significant declines. Back in 2022, when the market crashed due to soaring inflation, the Invesco ETF fell by a whopping 33%. But if you had held on for the past five years, even amid that downturn, you'd still be up around 77% right now.

The question to ask yourself is, how long are you willing to remain invested in the ETF? If it's just a few more weeks, months, or just a year, then perhaps pivoting to other, safer investments may be appropriate. But if you're in it for the long haul and are prepared to hang on for five-plus years, then riding it out and just staying the course may still be the best option.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.