Nvidia is cementing its position as a retail investor favourite in 2024, with nearly $30 billion in net inflows from individual investors this year. As artificial intelligence (AI) reshapes industries, retail traders are flocking to Nvidia, recognising its dominance in the AI space.
Retail investors drive Nvidia’s record growth
Nvidia’s appeal to retail investors has been nothing short of phenomenal in 2024. According to Vanda Research, individual investors have poured almost $30 billion into the company, making it the most-bought equity by retail traders this year. This is nearly double the net inflows of the SPDR S&P 500 ETF Trust (SPY), marking a shift in retail preferences toward AI-centric companies.
Marco Iachini, Senior Vice President at Vanda, notes that Nvidia’s extraordinary stock performance has dethroned Tesla as the retail darling. “The performance speaks for itself,” he said, referencing Nvidia’s 180% surge in 2024.
AI revolution fuels retail interest in Nvidia
The rise of AI in everyday life has been a major catalyst for Nvidia’s growing popularity. Investors like Michael MacGillivray, a 25-year-old from Michigan, see Nvidia as synonymous with AI innovation. “Whenever you look at AI, it’s like all the roads lead to Nvidia,” he explained.
The company’s leadership in AI-enabled chips and its admission to the prestigious Dow Jones Industrial Average further solidify its reputation as a cornerstone of the tech industry. Despite market volatility in December, Nvidia’s market cap soared past $3 trillion, positioning it as the second most valuable company in the United States.
Nvidia dominates retail portfolios
Data reveals that Nvidia now accounts for over 10% of the average retail investor’s portfolio, a significant leap from 5.5% at the start of 2024. For many, like Genevieve Khoury, a social media marketer, Nvidia represents a long-term investment. “It kept going up and up,” she said, highlighting its potential as a nest egg for major life purchases.
What’s next for Nvidia and retail investors?
While Nvidia continues to attract retail attention, its meteoric rise may inspire a broader shift toward AI-focused stocks. Analysts suggest that companies like Palantir could be the next big retail favourites.
Despite recent cooling in inflows, experts like Gil Luria of D.A. Davidson emphasise Nvidia’s enduring appeal. “The ascent was remarkable,” he noted, underscoring the pivotal role of retail investors in the company’s success.
