A stock that grows into 40% of a portfolio creates an awkward money problem. Selling can create a capital-gains tax bill, while holding leaves a large share tied to one company. Neither choice exists in a vacuum, because the tax cost depends on the shares sold, their cost basis, holding period, income and account type.
The decision is less about predicting the stock’s next move and more about comparing two costs. One appears on a tax return. The other can show up in the portfolio if that company takes a major hit.
