That's exactly what has happened with Nvidia. Over the past year, Nvidia stock is up by 166% as the surge in AI investment has been a massive tailwind to the business. On the other hand, even including its massive dividend yield, the YieldMax NVDA Option Income Strategy ETF is up by about 105%. That's 61 percentage points of underperformance.

Nvidia has led the S&P 500 ( ^GSPC -0.29%) higher this year amid frenetic interest in artificial intelligence (AI). The stock has surged 136% since January, and Wall Street analysts forecast median upside of 30% from the current share price of $115. But betting on a single AI stock is a bad strategy.

Nvidia shares looked set to rack up more gains on Thursday, rising amid the broader rally triggered by the Federal Reserve’s decision to slash interest rates by a half a percentage point.The chip designer’s stock was up 3.

Nvidia’s stock historically has made dramatic moves in the year after initial Fed interest-rate cuts, and it has outperformed the S&P 500 on average when looking at all rate cuts since the IPO.

Nvidia's huge stock rally is still exerting an outsized influence over the S&P 500 index , reinforcing concerns that broader markets could be hurt if the chipmaking giant's fortunes turn.