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Maximizing Nvidia’s Milestone: 4 Strategic Approaches for Effective Stock Management

Discover effective strategies to manage concentrated stock positions, optimize gains, and mitigate risks in light of the company's soaring share price.

With Nvidia’s remarkable ascent and recent entry into the prestigious $1 trillion club, current and former employees have a unique chance to reap substantial benefits from the company’s accomplishments. However, along with this opportunity comes a set of challenges. This article aims to explore 4 diverse steps and strategies that can assist you in effectively managing your concentrated stock position, maximizing potential gains, and minimizing associated risks.

1

Understanding Concentrated Stock Positions

What is a Concentrated Stock Position?

A concentrated stock position occurs when a significant portion of an individual’s investment portfolio is tied up in a single stock. In the case of Nvidia employees, this could be due to owning a large number of company shares, either through stock options or restricted stock units (RSUs). It’s important to note that during periods of exceptionally strong returns — Nvidia’s share price is up more than 150% so far this year — a portfolio’s stock concentration can increase even without making a conscious decision.

Why Concentrated Stock Positions Pose a Risk

While holding a large stock position in a high-performing company like Nvidia may seem like a lucrative opportunity, it can also increase risks. The primary risk is the lack of diversification, which can expose an individual to significant losses if the company’s stock value declines.

2

Evaluating Your Nvidia Concentrated Stock Position

Assessing the Portfolio Concentration

Before deciding on a strategy to manage your concentrated stock position, it’s essential to determine the extent of your portfolio concentration. This can be done by calculating the percentage of your total investments held in Nvidia shares. A general rule of thumb is that holding more than 10%–15% of your total investments in a single stock is considered a concentrated position.

Understanding the Tax Implications

As you’re determining your strategy, you need to be keenly aware of how taxes factor into the process. For instance, if you were granted stock options, you might be subject to taxes when you exercise them. Similarly, if you hold RSUs, taxes may be due upon vesting. Understanding the tax consequences of your choices can help you make more informed decisions.

3

Strategies for Managing Your Nvidia Concentrated Stock Position

Diversifying Your Portfolio

One of the most effective ways to manage a concentrated stock position is by making sure your portfolio contains an appropriate mix of assets. For instance, by selling and then reallocating some of your Nvidia shares into other investments, you can mitigate the risk associated with holding a significant portion of your wealth in one single stock. Portfolio diversification can be achieved through various means, such as investing in other stocks, bonds, mutual funds or other assets.

Utilizing Stock Options

If you hold stock options as a part of your Nvidia compensation package, you can use them strategically to manage your concentrated stock position. For example, you could exercise your options and sell the shares immediately — known as a cashless exercise — to reduce your concentration in Nvidia stock. Alternatively, you could exercise your options and hold the shares for a more extended period, potentially benefiting from future growth while deferring taxes.

Implementing a 10b5-1 Trading Plan

You can also explore setting up a 10b5-1 trading plan, which allows company insiders, such as engineers at Nvidia, to sell their shares at predetermined intervals and prices. This can help you systematically reduce your concentrated stock position while mitigating the risk of insider trading allegations. We recommend that you consult with a financial advisor to determine if a 10b5-1 plan is suitable for your situation.

Hedging with Options

Another strategy to consider is hedging your Nvidia concentrated stock position through options. This could involve purchasing put options — which give you the right to sell your shares at a predetermined price — on Nvidia shares. If the stock price declines, the value of the put option will typically increase, offsetting any losses in the stock value. However, keep in mind that this strategy comes with additional costs and may not be suitable for every investor.

Donating Shares to Charity

Finally, another approach is to consider giving some of your Nvidia shares to a charitable organization. This strategy allows you to reduce your concentrated stock position while potentially receiving a tax deduction for the fair market value of the donated shares — all while benefiting a worthy organization.

4

Partnering with a Wealth Management Firm

While it’s a good problem to have a windfall from a large stock gain, it still presents a challenge.  That’s why we suggest working with a wealth management firm to help you navigate your concentrated stock position. An experienced financial advisor should have the expertise to help you devise a personalized strategy that aligns with your financial goals and risk tolerance. Additionally, they can provide guidance on tax-efficient approaches and provide long-term guidance.

Selecting the Right Wealth Management Firm

When choosing a wealth management firm, you should consider factors such as their experience in handling concentrated stock positions, familiarity with the technology sector and their overall approach to wealth management. It’s essential to select a firm that understands your unique needs as an engineer at Nvidia so you can receive tailored solutions that fit you.

Establishing a Long-Term Relationship

Developing a lasting relationship with a wealth management firm can be advantageous, as they can continuously monitor your concentrated stock position and make adjustments as needed. This can help ensure that your investment strategy remains aligned with your financial goals over time.

As Nvidia share prices keep soaring higher, you need to pay close attention to how much of your wealth is in only one holding. By employing strategies such as diversification, utilizing stock options, implementing a 10b5-1 trading plan, hedging with options or donating shares to charity, you can effectively manage your stock positions while maximizing potential gains and minimizing risks. Partnering with Cerity Partners can further ensure that you make well-informed decisions designed for your specific circumstances.

Meet Myles VanderWeele

Myles is a Partner based in the San Francisco office. He provides investment and financial planning advice to help clients achieve their short- and...Read more

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Myles VanderWeele

Meet Emily Taken-Vertz

Emily is a Principal based in the San Francisco office. She assists clients with tax planning, intergenerational wealth transfers, and the practical...Read more

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Meet Dustin Ribergaard

Dustin is a Principal based in the San Francisco office. He is a member of the Digital Marketing Team, serving as the company’s Lead Concierge, a...Read more

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Dustin Ribergaard

Cerity Partners is not contracted with, endorsed by or affiliated with Nvidia. 

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Please read important disclosures here.

Myles VanderWeele
Emily Taken-Vertz
Dustin Ribergaard

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Your Introduction to a Trusted Financial Partner Awaits

Our Concierge Program offers a simple, personalized approach to finding your ideal financial advisor.

Schedule your complimentary 30-minute discovery call so we can understand your unique financial and life goals and match you with the advisor most well suited to help.

Dustin Ribergaard's headshot

Dustin Ribergaard

Lead Concierge

Call us to Schedule: (212) 202-1810

Find your ideal financial advisor with our personalized Concierge Program.

Call Us: (212) 202-1810

or

Schedule a complimentary discovery call now:

Book Time Online Now

Where are your liquid assets held?

Book your meeting

This 30-minute call with me is designed to better understand your unique financial and life goals and match you with the advisor most well suited to help.

Looking forward to
speaking with you!

Dustin Ribergaard

Lead Concierge

Dustin Ribergaard's headshot

Thank you for your interest

Thank you for your interest in our financial services. We appreciate the opportunity to connect and learn about your financial goals. A representative will be in touch to discuss your financial needs.

Questions? (212) 202-1810

Thank you for booking a meeting with us!

We look forward to connecting with you soon.

Here are some valuable insights to read before your meeting

blog image background

Natalia Tchetchoulina

Partner

Estate Planning

How to Pass Down Prized Jewelry, Art, and Cars  

May 28, 2025 - Contemporary collectors want to convey their legacy to future generations. Learn how to properly pass down jewelry, art, and more to ensure the legacy endures.

blog image background

Kim Curtis

Partner

Individuals and Families

5 Mistakes Athletes Make with Name, Image, and Likeness Income  

May 29, 2025 - The Name, Image, and Likeness (NIL) era has transformed collegiate athletics, but that opportunity comes with responsibility. Learn how to avoid five common mistakes.

blog image background
Economic and Market Outlooks

Video: June 2025 Economic & Market Outlook

June 2, 2025 - Markets have rebounded, and recession risks have eased—Jim Lebenthal weighs in on what investors should watch in this market outlook.

  • General inquiries: click here
  • Institutions and non-profits: click here
  • Corporations: click here

Learn about our Privacy Policy

By clicking “Schedule Now”, you acknowledge that we collect your name, email address and phone number to respond to your inquiries and provide you information about our products and services in accordance with our Privacy Policy. If you are a California resident, please see our CCPA Notice to California Residents.