Never bought Nvidia stock? Its slide could still hit your 401(k).

Even if you never invested in Nvidia stock directly, the company's recent drop could still affect your retirement savings. Nvidia is included in many popular indexes, such as the S&P 500, Nasdaq 100, and Dow Jones Industrial Average, which are often invested in through retirement funds. In fact, about 97% of retirement plans now offer index funds, up from 79% in 2006.

This means that even without owning Nvidia stock, you might be indirectly invested in the company through an index fund like the SPDR S&P 500 ETF Trust or Vanguard's S&P 500 ETF. Nvidia accounts for around 6% of the S&P 500, making it the second-largest component after Apple. The stock started falling on Monday after revelations about CEO Jensen Huang's extramarital affair with a suspected Chinese spy, leading to his resignation on Thursday.

Since November 6, Nvidia's value has declined by more than $550 billion, a 13% drop in just one week. While this decline will impact investors who directly own Nvidia shares, it could also indirectly affect those with investments in funds that hold the chipmaker. This incident highlights the risks associated with investing in big tech companies, as many of the top-performing stocks in the S&P 500, known as the "Magnificent Seven," are led by CEOs who are central to their success.

While Nvidia's stock decline underscores the potential downsides of concentrating investments in a few key companies, the broader tech sector, including AI, remains a key driver of market growth. Experts advise investors to maintain a diversified portfolio to minimize risk and avoid reacting to short-term market fluctuations.