Your pension is likely invested in some of the largest companies in the world - including NVIDIA, a key global player in the graphics processing unit (GPU) and artificial intelligence (AI) sectors. Current geopolitical events are influencing NVIDIA’s performance, which in turn affects your pension. Let’s take a look at why this is.
How does NVIDIA’s performance affect my pension?
Shares represent a unit of ownership in a company. When you buy shares, you become a part owner of that company, and your ownership is proportional to the number of shares you hold.
The value of a share is worked out by taking the company’s value and dividing it by the number of shares in issue. This then forms the individual share price. It’s this share price that goes up and down in value over time. The price can move according to current market conditions, historic performance and potential growth opportunities.
If you were to look at your own pension closely, you’ll see that you probably own a small percentage of many of the world’s largest and most successful companies. The top holdings in your pension refer to the companies you have the largest investment in. For most pension savers, NVIDIA will likely be one of the top 10 holdings in your pension fund.
What is NVIDIA?
NVIDIA was founded in 1993 by Jen-Hsun Huang, Chris Malachowsky, and Curtis Priem in California. With a vision to revolutionise computing, they initially focused on GPUs (these are computer chips that render images and videos) for the gaming market. Its first product, the NV1, was released in 1995, marking the beginning of its journey in high-performance graphics.
Today, NVIDIA is the third largest company in the world with a market capitalisation (total value) of $2.7 trillion. ‘Market capitalisation’ is calculated using the present share price multiplied by the total number of shares.
NVIDIA is also one of the seven leading technology companies in the US (also known as the ‘Magnificent Seven‘) recognised for its innovation and strong performance.
How much of a typical UK pension is invested in NVIDIA?
Pensions typically put a large portion of your funds into company shares (equities) through the stock market. This strategy aims to grow your wealth over the long term, as company shares are typically one of the best performing asset types.
As NVIDIA is currently one of the largest companies in the world, it’s a common holding in many investments.
While the exact percentage of NVIDIA in a typical UK pension fund varies, NVIDIA makes up around 4% of the MSCI World Index, a widely followed global stock market index which tracks the performance of many established companies across 23 developed countries worldwide.
As such NVIDIA could represent a small percentage of the typical UK pension plan. Current geopolitical events are influencing NVIDIA’s share price performance, which in turn could affect your pension balance.
How is NVIDIA affected by President Trump’s tariffs in 2025?
The return of US President Donald Trump has brought renewed attention on tariffs - which are taxes on imported goods. His administration has escalated the trade war with China, announcing a steep 145% tariff on Chinese-made products.
These tariffs harmed NVIDIA’s supply chain as it relies heavily on Chinese factories for manufacturing semiconductor and GPUs for computers. In the table below you can see how short-term uncertainty from US tariffs have shaken the value of NVIDIA shares. However, the long-term trajectory shows strong growth.
| Company | 3-month performance | 1-year performance | 5-year performance |
|---|---|---|---|
| NVIDIA | -19% | +20% | +1,545% |
Source: Market Watch. Data as of 31 March 2025.
Fortunately, the Trump Administration later removed ‘reciprocal tariffs’ for smartphones, computers and other electronic devices - although these exemptions could be temporary.
However, NVIDIA now faces additional challenges as the US government tightened export rules. The rules require licenses to export one of its most popular products - its H20 AI chip - to China. This new restriction is expected to cost NVIDIA $5.5 billion due to inventory commitments.
These tariffs are part of Trump’s wider strategy designed to reduce the trade deficit and boost domestic manufacturing. Founder and CEO, Jensen Huang, has committed several billion dollars to make products in the US over the next four years.
What could make the NVIDIA share price go up and positively impact your pension balance?
Over the next three months, the share price could rise if:
- NVIDIA exceeds expectations in its next quarterly earnings report (this looks at the profits and losses for the prior three months). This could lead to a short-term spike in the share price;
- NVIDIA announces new product launches or partnerships in the AI or gaming sectors, which could excite investors and signal future growth opportunities; and/or
- the Federal Reserve, the Central Bank in the US, decreases interest rates. This could boost consumer spending power and encourage businesses to borrow at a lower interest rate and allow them to consume more goods.
Over the next year, the share price could rise if:
- NVIDIA continues to dominate the AI hardware market with its GPUs, boosting its profitability;
- NVIDIA expands into emerging markets, such as India, where demand for gaming and AI technologies is growing; and/or
- NVIDIA boosts its profitability by increasing its software and subscription-based offerings.
Over the next five years, the share price could rise if:
- NVIDIA achieves breakthroughs in new industries, such as autonomous vehicles or edge computing, where its GPUs and AI expertise could play a critical role;
- there’s sustained demand for NVIDIA’s products and it maintains its leadership in AI and gaming technologies; and/or
- strong cash flow allows NVIDIA to reinvest in innovation, buy back shares, or pay dividends, which could support long-term stock price appreciation.
What could make the NVIDIA share price go down and negatively impact your pension balance?
Over the next three months, the share price could fall if:
- NVIDIA misses revenue or profit targets in its quarterly earnings report. This could lead to a ‘short-term sell-off’, as investors react quickly by selling its shares, leading to a short-term decline in the share price;
- supply chain disruptions occur, such as delays in manufacturing or shipping due to geopolitical tensions or reliance on Taiwan for computer chip production; and/or
- rising interest rates or fears of a global economic slowdown negatively impact tech stocks, including NVIDIA.
Over the next year, the share price could fall if:
- NVIDIA faces increased competition from other chipmakers, such as AMD or Intel, which could harm its market share in AI and gaming industries;
- regulatory challenges arise, such as antitrust scrutiny or export restrictions on advanced chips, which could limit NVIDIA’s growth potential; and/or
- an economic downturn weakens demand for high-end GPUs, particularly in gaming and data centres, which are significant revenue drivers for NVIDIA.
Over the next five years, the share price could fall if:
- NVIDIA faces increased competition in AI and GPU technologies;
- geopolitical tensions disrupt NVIDIA’s supply chain with Taiwan, or limit access to key markets like China; and/or
- the AI market experiences slower-than-expected growth, reducing demand for NVIDIA’s products and impacting its long-term growth trajectory.
Conclusion
- Your pension likely has a small investment in NVIDIA - most pensions invest a portion of your retirement money in NVIDIA because it’s one of the largest and most successful companies in the world.
- When you invest, you own a portion of the company - the value of these company shares will fluctuate based on market conditions, affecting the value of your pension on a given day.
- Current events can impact your investments - geopolitical events, such as tariffs imposed by the Trump Administration, can affect NVIDIA’s costs and share price. This in turn impacts your pension balance.
- Politics is short-term and investing is long-term - while current events can cause short-term volatility in share prices, successful investing typically focuses on long-term growth.
Staying informed about current events, and their impact on your pension, can help you invest with confidence - even in a changing market.
Have a question? Get in touch!
Do you want to know more about your pension plan with PensionBee? You can check out our Plans page to learn how your money is invested in different assets and locations, or log in to your BeeHive to see your specific plan. You can always send comments and questions to our team via engagement@pensionbee.com.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
