by Noel Randewich
(Reuters) – Nvidia has become the most traded stock on the New York Stock Exchange, dethroning Tesla as investors step up their bets on artificial intelligence (AI).
The rise in equity indices in the United States is fueled by enthusiasm around AI, and the importance that Nvidia is gaining in stock market transactions could accentuate the impact of a surprise on its turnover, in particular if it is below the consensus.
The chipmaker’s quarterly figures, released Wednesday, will be one of the most closely watched events of the week on Wall Street. Some strategists warn that only record numbers could continue to support the rally that has sent the stock soaring 47% in 2024.
About $30 billion in Nvidia shares have changed hands daily on average over the past 30 sessions, compared to $22 billion for Tesla over the same period.
As of 2020, Tesla was the most traded stock each day on the Wall Street Stock Exchange, according to LSEG data, with turnover rate – the price of a stock multiplied by the number of shares traded – peaking at over of $35 billion several times over the past few years.
On Friday, trading in shares of Nvidia and Super Micro Computer, another company benefiting from the AI boom, accounted for more than 40% of the entire turnover of the 10 most traded U.S. stocks, and which include Tesla, Meta Platforms, Apple, Amazon and Microsoft.
“This is the start of a new era for market operators, comparable to the early days of the internet, and Nvidia is at the forefront” of this change, according to Dennis Dick, trader at Triple D Trading in Ontario, Canada.
Dennis Dick cautions, however, that the high turnover rate of AI-related stocks suggests that retail investors and algorithmic traders are driving up stock prices based on price momentum rather than fundamentals.
Super Micro, which sells AI-related server components to Nvidia, saw its value more than triple to $45 billion in 2024. The stock fell 20% from Friday’s record high, after Wells Fargo began covering the stock with a “perform in line” recommendation, with the stock’s current valuation already ruling out a “strong rise” in price, according to the bank.
Nvidia controls about 80% of the market for advanced AI chips, and last week became the third largest capitalization on Wall Street, behind Microsoft and Apple. Nvidia’s capitalization increased from $540 billion a year ago to $1.8 trillion.
In 2024, Tesla’s stock fell 20% amid slowing demand for electric vehicles.
(Report by Noel Randewich; Corentin Chappron, edited by Sophie Louet)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
