Instead Of Tesla, NVIDIA Is The Most Traded Stock On Wall Street

(CTN News) – As Wall Street’s most traded stock by value, NVIDIA replaces Tesla. This confirms the importance of AI-related investments for investors after becoming the third-most valuable company in the country.

Should Nvidia’s revenue growth fall short of investors’ high expectations, the chipmaker’s outsized representation in day-to-day stock trading may leave investors more vulnerable to a Wall Street rally that has been fueled by euphoria about AI.

On Wednesday, the Santa Clara, California chipmaker will release its quarterly report, making it one of Wall Street’s most anticipated events. Nvidia’s stock has soared 40% in 2024 and some strategists think anything short of a blowout report could reverse that rally.

Stocks of Nvidia fell about 5% on Tuesday, as investors anticipated the report.

The company’s shares traded for an average of $30 billion per day over the past 30 sessions, outpacing Elon Musk’s electric carmaker, which changed hands for $22 billion per day.

Data from LSEG shows Tesla has dominated US stock trading since 2020, with turnover — the sum of a stock’s price multiplied by its number of shares exchanged — topping $35 billion several times.

Nvidia and Super Micro Computer, another AI-driven company

Accounted for 46% of all turnover of the 10 most traded US stocks on Tuesday, including Tesla, Meta Platforms, Apple, Amazon, and Microsoft. “We’re at the dawn of a new era of trading, like the dawn of the internet, with Nvidia in the lead,” said Dennis Dick, a trader at Triple D Trading in Ontario.

He also warned that high turnover in AI-related stocks suggests retail investors and algorithmic traders are driving share prices higher based on momentum instead of fundamentals.

By 2024, Super Micro’s value is expected to triple to $43 billion as it sells AI-related server components to Nvidia. It fell about 5% after Wells Fargo rated it equal weight on Tuesday, saying its valuation already discounts a “solid upside” after the stock plunged 20% from record highs on Friday.

The company controls 80% of the high-end AI chip market, and last week it surpassed Amazon’s and Alphabet’s market caps to become the third-most valuable company on Wall Street.

After Nvidia’s shares fell Tuesday, Alphabet and Amazon’s stock prices both declined ahead of the chipmaker. The stock market value of Nvidia last stood at $1.7 trillion, up from $540 billion a year earlier.

Tesla’s stock has tumbled 23% so far in 2024 due to tepid demand and growing competition for its electric cars.

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