The Rise of AI-Fueled Investments
As artificial intelligence (AI) becomes increasingly prevalent in daily life, investors are taking notice. One company, in particular, has captured the attention of both individual and institutional investors: Nvidia.
A Leader in AI
Nvidia, a pioneer in AI technology, has seen a significant influx of investments from everyday investors. According to Vanda Research, nearly $30 billion has been poured into Nvidia this year, making it the most-bought equity by retail traders on net in 2024. This surge in investments has propelled Nvidia to the top of the charts, with the company’s market cap exceeding $3 trillion and its stock price rising over 180% this year.
Individual Investors Take Notice
One such individual investor is Michael MacGillivray, a 25-year-old from Michigan who has invested thousands of dollars in Nvidia shares. “Whenever you look at AI, it’s like, all the roads lead to Nvidia,” MacGillivray said. “It definitely was a great investment.” MacGillivray’s purchases have contributed to the nearly $30 billion poured into Nvidia on balance by everyday investors this year.
Nvidia’s Rise to Prominence
Nvidia’s impressive performance has earned it a spot in the highly regarded Dow Jones Industrial Average, and it is now the second-most valuable company in the U.S. The chipmaker’s stock has also become a significant holding in the average investor’s portfolio, with a weight of more than 10% in the typical mom-and-pop trader’s portfolio, up from just 5.5% at the start of 2024.
Retail Investors Drive Growth
The influx of retail investors has played a significant role in Nvidia’s growth. Vanda data shows that Nvidia’s retail inflows on net in 2024 are more than 885% larger than the amount seen just three years prior. “Nvidia really stands out in terms of how quickly retail investors became such a big part of the ownership stake,” said Gil Luria, head of technology research at D.A. Davidson.
Optimism Abounds
Despite recent volatility, individual investors remain optimistic about Nvidia’s leadership in AI and focus on innovation. “I think that it’s only going to keep rising exponentially,” said Prajeet Tripathy, a recent college graduate. Genevieve Khoury, a social media marketer, plans to hold onto her shares until she can cash in the nest egg for a down payment on a home or other significant purchase.
The Future of AI-Fueled Investments
As AI continues to shape the investment landscape, it will be interesting to see which companies will emerge as leaders. Palantir, a software stock, has gained traction among retail investors during the fourth quarter and could be a favorite in the new year. One thing is certain, however: AI-fueled investments are here to stay, and individual investors are taking notice.
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