AI giant NVIDIA has become the "favorite" of American retail investors!
The latest disclosed data shows that since the beginning of this year, retail investors have net bought $29.8 billion (about 217.5 billion yuan) of Nvidia stocks, a surge of 885% compared to three years ago, making it the US stock with the largest net buying volume by retail investors this year.
In the US stock market, Nvidia's stock price has risen by over 180% since the beginning of the year, with a latest market value of $3.43 trillion. Marco Iachini, Senior Vice President of Vanda Research, said, "Nvidia's stock price has risen dramatically and has taken the limelight from Tesla." Bank of America analysts said that in the first half of 2025, the AI semiconductor sector will maintain strong momentum due to the AI investment boom and Nvidia's Blackwell chip deployment driven by US cloud service customers.
On the A-share market, on December 26th, Nvidia concept stocks collectively strengthened, with companies such as Envision, Jingwang Electronics, Mobile Communications, Huaqin Technology, and Megmeet hitting the daily limit up. Jingfeng Mingyuan rose more than 11%, while companies such as Halo New Network, Tianfu Communication, and Longxun Holdings all rose more than 7%.
Retail investors' fierce pursuit 'of Nvidia
On December 25th Eastern Time, Vanda research data showed that as of December 17th, retail investors had a total net purchase of $29.8 billion in Nvidia stocks, making the company the US stock with the highest net purchase by retail investors in 2024. Compared to three years ago, Nvidia's net inflow of retail funds has increased by 885% this year.
The proportion of retail investors holding positions in Nvidia has also significantly increased. According to Vanda's data, Nvidia's weight in retail investment portfolios has increased from 5.5% at the beginning of this year to over 10%. Currently, Nvidia is the second largest holding for retail investors, second only to Tesla.
Since the beginning of this year, Nvidia has been favored by investors of all sizes. Last month, Nvidia officially joined the Dow Jones Industrial Average and became the most outstanding individual stock among the 30 constituent stocks of the index. Despite slight fluctuations in December trading, Nvidia is still expected to achieve a growth rate of over 180% by the end of 2024. Nowadays, its market value has exceeded $3 trillion, making it the second largest company in the United States by market value, second only to Apple.
Marco Iachini, Senior Vice President of Vanda Research, said, "Nvidia's stock price has risen dramatically, stealing the spotlight from Tesla
Of course, having a large number of individual investors holding stocks can also bring about more intense volatility. Morningstar stock strategist Brian Colello stated that as a highly valued company, Nvidia's volatility is "quite significant", which demonstrates the role that retail investors can play in pulling the stock price. Colello exclaimed that sometimes large companies like this can have very large stock price fluctuations on any given day, which is really surprising.
The popularity of NVIDIA is not only reflected in stock market trading, but also extends to the real world. In August of this year, a group of investors held a NVIDIA earnings report viewing party in New York City, attracting a large number of retail investors' attention. This activity occurs after the company implements a 10-1 stock split, which typically attracts more retail investors to participate.
It is worth noting that Nvidia recently participated in the Series C financing of xAI, a subsidiary of Elon Musk. According to foreign media reports, xAI has completed its Series C financing with a total amount of $6 billion. Multiple companies participated in xAI's current investment round, including technology and finance giant A16Z, asset management group BlackRock, Fidelity Management&Research, Lightspeed Ventures, Morgan Stanley, Sequoia Capital, and others. Strategic investors NVIDIA and AMD also participated in xAI's current round of financing, and both companies will continue to support xAI in expanding its infrastructure. Musk welcomed Nvidia's investment and said on social media platform X, "It's an honor for us that Nvidia has become our investor
Besides Nvidia, another company that is highly sought after by retail investors is Palantir. According to Vanda's research data, Palantir's inflow of funds performed well in 2024, becoming the ninth largest net buying security, surpassing Amazon, Alphabet, and Microsoft.
Palantir's stock price surged nearly 380% in 2024, becoming the best performing stock in the S&P 500 index. Palantir CEO Alex Karp recently expressed his gratitude to investors in a video, specifically mentioning the individual investors who have gone beyond tradition and bravely invested.
Investment banks are optimistic about next year's performance
Recently, Morgan Stanley stated that Nvidia remains the bank's "preferred stock" for next year, and its latest Blackwell chip series will be the strongest "tailwind" for the company in 2025.
Morgan Stanley reiterated its "overweight" rating on Nvidia's stock and stated that the expected success of the company's next-generation artificial intelligence chip Blackwell has driven the bank's bullish sentiment. The target price given by the bank is $166 per share. Currently, Nvidia's stock price is $140.
Bank of America is also optimistic about Nvidia's stock price performance in 2025. The analyst team of Bank of America pointed out that one of the core driving forces of the "long-term bull market" in the US stock market since 2023- chip stocks, which regained global funding favor after being sold off at the beginning of the earnings season, are expected to continue attracting funds to rush in in 2025. Therefore, it is very likely to once again start a "mad cow" like upward trend, becoming the most core focus of the US stock market.
The "AI chip giants" of the US chip sector, namely Nvidia, Broadcom, and Maiwell Technology, are all listed on Bank of America's 2025 "Preferred Chip Stocks List". The chip stocks on this list also include semiconductor equipment giant Panlin Group, automotive chip leader Anson Semiconductor, and EDA software leader Kenteng Electronics.
According to a team analysis by Bank of America, Nvidia, Broadcom, and Maiwell Technologies are expected to continue benefiting from market demand closely related to AI chips in data centers. The demand for AI computing resources from ultra large scale cloud computing customers and major global data center operators is still showing explosive expansion, while Panlin is expected to benefit from the continued recovery of flash memory demand and semiconductor equipment spending in the Chinese market.
In addition, the automotive chip giant, ON Semiconductor, which has long underperformed the US stock market and the Philadelphia Semiconductor Index, is expected to benefit significantly from the recovery of final demand for electric vehicles and the entire automotive industry, which may occur in the second half of next year. Kenteng Electronics is expected to benefit in the long term from technology giants such as Nvidia, AMD, and Apple, as well as cloud computing giants such as Amazon and Microsoft accelerating the development of high-performance AI chips. EDA software tools have become an indispensable tool for chip giants such as Apple, Nvidia, and AMD to design all types of chips, and their demand for EDA software is expected to continue to rise.
According to Vivek Arya, an analyst at Bank of America, "In the first half of 2025, the AI semiconductor sector will maintain strong momentum due to the AI investment boom and the deployment of Nvidia Blackwell chips driven by US cloud service customers. However, investment interest in the second half of the year may shift towards automotive and industrial chip manufacturers, driven by inventory replenishment and the recovery of automotive production, assuming a gradual global economic recovery
However, Bank of America has also identified potential risks for chip stocks. Arya's team stated that although the overall outlook for the semiconductor market remains optimistic, there are still many unknown factors in 2025, with the biggest risk factors concentrated in the growth of market demand related to AI and the broader macroeconomic recovery situation. In addition, given the accelerated penetration of AI applications into business operations and the daily lives of individual consumers, the "rotation market" of software stocks benefiting from AI will continue in 2025. This trend may create intermittent pressure on the rise of popular chip stocks, driving funds to profit from AI chip stocks and shift towards AI software stocks.