- Retail investors put more than $562 million into Nvidia shares on a net basis on Monday amid the chipmaker’s historic sell-off, according to Vanda Research.
- That marked a record for net inflows into Nvidia, showing everyday investors bought the dip while institutions dumped shares.
Retail investors rushed into Nvidia on Monday, signaling Main Street support for the chipmaker despite the emergence of an artificial intelligence model from China that battered its shares and caused a historic, $600 billion loss in market value.
Everyday traders bought more than $562 million worth of Nvidia shares on balance Monday, according to data from Vanda Research that subtracts total outflows from inflows. That marked a record for daily net inflows into Nvidia as mom-and-pop investors bucked their institutional counterparts, who dumped the stock en masse.
The buy-in from individuals came as Nvidia suffered its biggest one-day loss, tumbling around 17%, since the onset of the Covid pandemic in March 2020.
Monday’s plunge came in the wake of news that an AI model from Chinese startup DeepSeek scored high performance marks more cheaply and in far less time than Western counterparts.
The development raised doubts about the U.S. strategy of spending huge sums on AI and the data centers they require, just as President Donald Trump last week announced a multi-billion dollar AI project called Stargate. The sudden rise of DeepSeek also rang alarm bells that America may not lead in AI technology, offering chilling reminders of what some described as a “Sputnik moment” at the dawn of the Space Race.
Nvidia told CNBC on Monday that DeepSeek’s model was an “excellent AI advancement.” DeepSeek’s offering reportedly outperformed the best models of OpenAI and other U.S. competitors, further stoking concerns about the status of the U.S. in AI.
For their part, however, individual investors were unfazed. Data from Vanda shows the chipmaker was the most-purchased security by average investors on net in 2024 — surpassing even the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500.
The show of support from small-scale traders is the latest example of retail investors diverging from monolithic Wall Street, as happened during the meme stock craze that captivated U.S. markets during the pandemic. The difference now being that individuals can’t swing the price of Nvidia, with a market value Tuesday near $3 trillion, the way they could small-cap stocks such as video game retailer GameStop or movie theater chain AMC four years ago.
Despite the difference in scale, there were similar overtones on Monday, however. Nvidia was the most-mentioned stock on the popular WallStreetBets Reddit forum over the past 24 hours, with mentions surging more than 175% as its shares plunged, according to Quiver Quantitative data as of Tuesday morning.
One Reddit user posted a photo of their Nvidia position on the WallStreetBets forum with the title “in Huang we trust,” a reference to Nvidia CEO Jensen Huang. Another said Monday’s moves were a “classic overreaction” and “missed the bigger picture.”
This post was originally published on CNBC Markets
