Retail investors have invested over $900 million into Nvidia shares this week, as individual traders rushed to acquire artificial intelligence stocks that faced significant declines due to concerns regarding China’s DeepSeek.
On Monday alone, retail traders purchased a net amount of $562 million, marking the highest recorded figure, followed by $360 million on Tuesday, according to data from Vandatrack.
The influx of interest in Nvidia and comparable companies comes as analysts on Wall Street work quickly to evaluate the implications of DeepSeek’s claims of developing an AI model comparable to those from leading U.S. companies like OpenAI, but at a lower cost. Nvidia experienced a historic sell-off, losing nearly $600 billion in market value on Monday, though it recouped some losses the following day.
According to Steve Sosnick, chief strategist at Interactive Brokers, there was an unprecedented volume of buy orders for Nvidia on their platform. He noted the remarkable imbalance between buy and sell orders, prompting questions about whether active traders are increasingly viewing sharp declines as significant buying opportunities.
Charles Schwab, the largest retail broker in the U.S. with $10 trillion in client assets, reported a rise in purchases of AI-related stocks including Nvidia. Additionally, Robinhood experienced its second-highest overnight trading volume on Sunday night as the AI sell-off gained momentum.
Steve Quirk, chief brokerage officer at Robinhood, mentioned that their customers tend to seize opportunities to invest in preferred stocks, highlighting their interest in Nvidia.
Discussion among individual traders on Reddit included references to Nvidia’s drop being a “Jevons Paradox buying opportunity,” reflecting the idea that as AI technology becomes more affordable and efficient, demand will increase. Another user emphasized that AI is expanding rather than slowing down, affirming Nvidia’s essential role in the industry and encouraging long-term investment.
Conversely, hedge funds that held substantial positions in Nvidia emerged as significant sellers of the stock during the downturn. Market participants indicated that much of the selling activity was driven by traditional long-only hedge fund clients taking positions amidst the market movement, with Nvidia representing approximately 10 percent of the total notional value traded in U.S. cash equities on Monday.
photo credit: www.ft.com
