On February 20th, Nvidia stole the spotlight on Wall Street by surpassing Tesla as the most traded stock by value. This development highlights the ever-growing significance of investments in artificial intelligence (AI) to investors.
Nvidia had positioned itself at the very front of this trend from the very start and thus has earned what it very well deserved. The anticipation surrounding Nvidia’s quarterly report, due to be released soon has grown huge as it could either sustain or disrupt the remarkable rally in Nvidia’s stock, which had surged by 40% in 2024.
On Tuesday, Nvidia’s stocks suddenly dropped about 5%, which as you would imagine left the investors feeling very anxious, and that too happened right before the quarterly report. Nvidia has surpassed Tesla just in the last month in terms of its average daily trading volume, which did give a boost to the investors and they had a notable shift in their behavior, becoming more confident in the former.
Super Micro, another company associated with Nvidia as it provides AI-related server components, also experienced a decline in its stock price following a recent surge. This decline came after Wells Fargo initiated coverage with a neutral rating, citing concerns about the stock’s already elevated valuation.
Nvidia is really good at making powerful AI chips, and most people buy them which is the reason they have about 80% of the market for these fancy chips. They’re now worth more money than big companies like Amazon and Alphabet, but still not as much as Microsoft and Apple. Even though the stock market has a constant degree of instability, Nvidia’s market value has not declined in recent months. They are currently a whopping $1.7 trillion which is a lot more than they were worth just a year ago.
In contrast, Tesla has faced several challenges in 2024, with its stock declining by 23% amidst concerns over softer demand for electric vehicles and also considering the intense competition in the market regarding this very aspect. This deviation in the performance of Tesla and all other companies highlight the varying wealth of companies that operate in the competitive tech sector. It is the same sector where Nvidia was seen riding high on its AI-related innovations while Tesla grapples with market headwinds.
What we can take away from all this especially with Nvidia’s amazing success is the importance and value of AI-related investments that relate to driving investors’ interest and ongoing market trends. This timely decision-making and good knowledge of market interest and trends is what led to Nvidia’s growth in most traded stock by value.