Nvidia CEO Jensen Huang arrived at the Russell Building on Capitol Hill on September 13, 2023 to attend the first Artificial Intelligence Insights Forum.
Tom Williams | Chongqing Roll Call Company | Getty Images
As Michael MacGillivray sees artificial intelligence becoming more and more common in everyday life, the 25-year-old wants his investments to reflect this. It didn’t take long for him to figure out how he wanted to play with the trend.
“Whenever you see artificial intelligence, it feels like all roads lead to NVIDIA” said MacGillivray, who spent thousands of dollars buying stocks this year from his home in Michigan. “It’s definitely a great investment.
MacGillivray’s acquisition has injected nearly $30 billion into Nvidia from ordinary investors this year, according to Vanda Research. As of December 17, this makes it the most purchased stock online by retail traders in 2024.
Compared to other categories, Nvidia’s net inflows were almost double. SPDR S&P 500 ETF Trust (SPY)a broad benchmark that tracks the U.S. stock market. It is also heading towards ruins step by step TeslaIt is a favorite stock among retail investors, earning the title of most bought in 2023.
“Nvidia is proving to be the stock that stole the show from Tesla with its impressive share price gains,” said Marco Iachini, senior vice president at Vanda. “The performance speaks for itself.”
“Up, up, up”
This is Nvidia’s latest achievement. For more than a year, the artificial intelligence giant has fascinated investors large and small. chip manufacturer Gained admission to highly regarded Dow Jones Industrial Average Last month, the 30-stock index was the top performer of 2024 so far.
Despite volatile trading in December, Seven Heroes stock will still be up more than 180% by the end of 2024. The surge has propelled the stock into an elite group of companies with market capitalizations above $3 trillion. Nvidia is now the second most valuable U.S. company
NVIDIA, YTD
Of course, this push for Nvidia stock has led to the stock taking on a larger role among the holdings of regular investors. Vanda data shows that Nvidia’s weight in the average retail investor’s portfolio has exceeded 10%, compared with only 5.5% at the beginning of 2024. .
Additionally, Nvidia’s net retail inflows through 2024 are more than 885% higher than three years ago.
“With retail investors becoming such a big part of ownership so quickly, Nvidia really stands out,” said Gil Luria, director of technology research at investment bank DA Davidson. “The uptick is pretty remarkable.”
One of the individual shareholders is social media marketer Genevieve Khoury. She first started buying stocks in 2022 on the recommendation of her father, who is in the tech industry. Curry plans to hold onto her shares until she can cash in her savings for a down payment on a home or other major purchase.
“It just keeps going up, up, up,” the Los Angeles-area resident said. “I just held it.”
“Jaw-dropping”
Vanda’s Iachini said capital inflows tend to surge after Nvidia’s earnings this year. Retail investors also bought during the decline in early August, which coincided with Broader market sell-off.
To be sure, inflows have cooled a bit as the stock has lost some steam. DA Davidson’s Luria noted that shares were more expensive six months ago than they have been in recent sessions.
Luria said that while Nvidia’s profits continued to beat Wall Street expectations, the beat wasn’t big enough to continue the stock’s rapid rise. Now, he says the stock has reached a more “balanced” and “reasonable” level.
Despite recent volatility, individual investors such as Prajeet Tripathy remain optimistic about the company’s leadership in artificial intelligence and its focus on innovation. “I think it’s only going to continue to grow exponentially,” said Tripathi, a recent college graduate.
Although investing is primarily a digital activity, market participants’ love for Nvidia has spilled over into the real world. In late August, some gathered in New York City to attend brilliantly–documented The watch party centered around Nvidia’s earnings report. The incident occurred within months of the stock’s 10-for-1 split, a move typically intended to incentivize retail investors.
Despite Nvidia’s large retail holdings, this factor has not driven up the price-to-earnings ratio as much as it has for Tesla and Tesla. PalantirLuria said. Still, Nvidia’s volatility is “considerable” for a stock of its size, which can highlight the role retail traders play in driving share prices, Morningstar equity strategist Brian Colello said.
“It’s jaw-dropping at times that a company of this size can see such large swings in stock price on any given day,” Colello said.
What do retail investors want next?
2024 marked the second consecutive year that net flows from a single stock exceeded those of the SPDR S&P 500 ETF Trust. However, Iachini said large inflows into ETFs could ease investors’ concerns about abandoning broad index funds that are seen as safe investments. Heavy inflows into big tech stocks over the past two years may reflect traders chasing Yakini said the bullish market continues.
Iachini said that despite the high returns, Nvidia may be a surprising choice for the typical domestic investor. Iachini said that despite Nvidia CEO Jensen Huang’s signature leather jacket, the company lacks a “god-like” personality that would attract the attention of retail investors. As an example, he cited Tesla CEO Elon Musk, who caused a stir this year by openly supporting President-elect Trump during the campaign.
Palantir Technologies CEO Alex Karp poses next to the company’s logo before an interview with Reuters in the Alpine resort of Davos, Switzerland, May 23, 2022.
Arnd Wegmann | Reuters
Looking ahead, Iachini said Palantir won over the retail crowd in the fourth quarter and could become a favorite in the new year. By 2024, the software stock had become the ninth most bought security, surpassing AmazonAlphabet and Microsoft, according to Vanda data.
Palantir CEO Alex Karp Thank you small investors A video released on Sunday features a snow-covered backdrop. “A huge thank you to all the individual investors who took the time and opportunity and had the courage to look beyond the traditional, rusty, hard clichés,” Karp said in the film, wearing reflective goggles and clutching his ski poles.
Fittingly, Palantir is the product Khoury, a California-based social media marketer, recently picked up on the advice of a friend. Currie holds out hope for developments like Nvidia’s, which would allow her to retain bragging rights to acquaintances who think they know more about investing than she does. So good so far: The stock surged nearly 380% in 2024, making it the stock market’s best performer S&P 500 Index year to date.
“In college, people tried to talk to me about it multiple times, like I didn’t know what I was talking about,” said Curry, who graduated this year with a degree in finance. “I thought, sure, yeah, I don’t know what I’m talking about, but I do have Nvidia.”
“Maybe,” she said, “my portfolio looks better than yours.”
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