Nvidia Surpasses Tesla as Most Traded Stock on Wall Street

Nvidia Stock

Chipmaker Nvidia (NASDAQ:NVDA) has overtaken Tesla (NASDAQ:TSLA) as the most traded stock on Wall Street, further solidifying its prominence after climbing to become the third most valuable U.S. company. This shift underscores the increasing significance of AI-related investments for investors.

The significant presence of Nvidia in daily stock trading suggests that investors could be more exposed if the chipmaker fails to meet its lofty revenue growth expectations. Such an outcome could potentially deflate the ongoing Wall Street rally, driven by enthusiasm surrounding artificial intelligence.

All eyes are on Nvidia’s quarterly report, scheduled for Wednesday, which is expected to be one of the most closely watched events of the week on Wall Street. Some analysts warn that anything less than stellar results could halt Nvidia’s remarkable stock surge of 47% in 2024.

Over the past 30 trading sessions, Nvidia has seen an average daily trading volume of about $30 billion, surpassing the volume for Elon Musk’s Tesla, which averaged around $22 billion per day during the same period.

Tesla has been dominating daily U.S. stock trading since 2020, according to data from LSEG, with trading volumes occasionally exceeding $35 billion in recent years.

On Friday, trading in Nvidia and Super Micro Computer (NASDAQ:SMCI), another AI beneficiary, accounted for over 40% of total turnover among the top 10 most traded U.S. stocks, including Meta Platforms (NASDAQ:META), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT).

Dennis Dick, a trader at Triple D Trading in Ontario, Canada, suggests that this trend indicates the emergence of a new era of trading, akin to the early days of the internet, with Nvidia leading the charge. However, Dick cautions that the high turnover in AI-related stocks may be driven more by retail investors and algorithmic traders chasing momentum rather than sound fundamentals.

Super Micro, a supplier of AI server components to Nvidia, has seen its market value triple to $45 billion in 2024. However, it experienced a 20% drop from its record highs on Friday following a cautious rating from Wells Fargo, which cited an already high valuation.

Nvidia currently dominates around 80% of the high-end AI chip market and recently surpassed the market capitalization of Amazon and Alphabet, making it the third most valuable company on Wall Street, behind Microsoft and Apple. Nvidia’s market value has surged from $540 billion to $1.8 trillion over the past year.

In contrast, Tesla’s stock has declined by 20% in 2024 amid concerns about sluggish demand for its electric vehicles and increasing competition.

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