As of December 17, Nvidia, the AI titan and chipmaker, has emerged as the most-bought stock among retail traders in 2024, with nearly $30 billion in net inflows each trading day. The net inflow to Nvidia stocks almost doubled when compared to SPDR S&P 500 ETF Trust (SPY), one of the most popular funds that tracks the S&P 500 Index.
The chipmaker is also set to surpass Tesla, the top retail investor pick in 2023.
Moreover, the company has been recognized as the best-performing stock in the Dow Jones Industrial Average in 2024. Its stock is expected to increase by over 180% by year’s end, pushing its market capitalization beyond $3 trillion. Nvidia is now the second-most valuable company in the U.S.
Nvidia’s stock now constitutes more than 10% of the average retail investor’s portfolio, a significant rise from just 5.5% at the beginning of 2024. As a result, its net inflows have surged by 885% compared to three years ago, with experts and investors continuing to recommend the company’s stock.
According to Gil Luria, head of technology research at D.A. Davidson, Nvidia’s rapid rise initially exceeded Wall Street’s expectations, but its price is no longer growing at the same rapid pace. Nevertheless, some investors remain optimistic about the company’s leadership in AI and its focus on innovation.
Luria also noted that, despite substantial retail ownership, its price-to-earnings ratio does not spike like Tesla and Palantir. However, Morningstar’s Brian Colello pointed out that Nvidia still exhibits “fairly significant” volatility for its size, highlighting the role retail traders play in driving share prices.
Meanwhile, Marco Iachini, senior vice president at Vanda, expressed surprise at the rise of Nvidia, noting that the company’s CEO, Jensen Huang, doesn’t have the same “God-like” personality as Elon Musk, CEO of Tesla, who is known for capturing the attention of retail investors.
