NVIDIA emerged as the stock most bought by U.S. retail investors this year. The amount invested in NVIDIA shares by individual investors has surged by over 885% compared to 2021.
According to CNBC and Vanda Research, on Wednesday, U.S. retail investors purchased $29.8 billion worth of NVIDIA shares from January 1 to December 17 this year. The second most purchased stock is the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index at $15.3 billion – nearly half the amount invested in NVIDIA. The list was followed by Tesla ($14.7 billion), the Invesco QQQ Trust Series 1 ETF (QQQ) tracking the Nasdaq 100 index ($9.8 billion), and AMD ($9.8 billion).
Vanda Research reports that due to the massive purchase of NVIDIA shares, NVIDIA now comprises over 10% of retail investors’ portfolios. This marks a significant 4.5 percentage point increase from 5.5% at the beginning of the year.
The research firm noted that NVIDIA’s stock price surged after its earnings were announced. Individual investors also heavily bought NVIDIA shares during the company’s decline in August.
Marco Iachini, Senior Vice President at Vanda, pointed out, “Nvidia turned out to be the one stock that kind of stole the show from Tesla because of impressive price gains,” adding, “The performance speaks for itself.”
Despite recent price stabilization, NVIDIA’s stock is set to close the year with a staggering 180% gain. This surge has propelled NVIDIA’s market capitalization to $343 billion, the second largest after Apple’s $3.93 trillion.
Last month, NVIDIA replaced Intel Corporation in the Dow Jones Industrial Average and has since outperformed all 30 other stocks in the index year to date.
As of Tuesday, NVIDIA’s stock closed at $140.22 on the New York Stock Exchange (NYSE), which analysts consider reasonable.
Gil Luria, an investment bank D.A. Davidson analyst, noted that while NVIDIA’s revenue and net income consistently exceed Wall Street’s consensus, the stock price has now returned to a more reasonable level.
Nevertheless, U.S. financial institutions expect NVIDIA’s stock to rise further. Bank of America (BofA) has set a target price of $190, while Rosenblatt Securities is even more optimistic with a $200 target.
