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Retail investors have ploughed more than $900mn into Nvidia shares this week as individual traders rushed to scoop up artificial intelligence stocks that sustained a heavy blow from fears over China’s DeepSeek.
Retail traders purchased a net $562mn on Monday, the most on record, and $360mn on Tuesday, according to data provider Vandatrack.
The rush into Nvidia and similar companies comes as Wall Street analysts hurry to assess how DeepSeek’s claims that it created an AI model on a par with US leaders like OpenAI at a much lower cost will affect spending for advanced chips. Nvidia shed almost $600bn in a historic sell-off on Monday before recovering some of those losses on Tuesday.
Steve Sosnick, chief strategist at Interactive Brokers, said there had been an “astounding” preponderance of Nvidia buy over sell orders on the trading platform on Monday.
“I don’t ever recall seeing an imbalance of that magnitude,” he added. “Has the active trader’s mantra become ‘the bigger the drop, the bigger the opportunity’?”
Charles Schwab, the largest US retail broker with $10tn of client assets, said it also saw increased buying across AI-related stocks, including Nvidia, while activity on Sunday night, as the AI sell-off began building steam, at Robinhood gave the online trading upstart its second-highest overnight volume, behind only the November 5 US presidential election.
“We saw buyers of Nvidia . . . our customers tend to take advantage of an opportunity to get into the names they like,” said Steve Quirk, chief brokerage officer at Robinhood.
One user posting on discussion site Reddit, a popular forum for individual traders to discuss strategies, called Nvidia’s fall a “Jevons Paradox buying opportunity,” in a reference to the theory that demand for technology like AI will increase as it becomes cheaper and more efficient.
“AI isn’t slowing, it’s expanding,” said another user. “[Nvidia] is still the backbone of the industry, and this dip is a buying opportunity for long-term investors.”
In contrast, hedge funds that had built up hefty positions in Nvidia were among the biggest sellers of the company’s stock on Monday, according to market participants.
“Most of the flow was classic long-only [hedge fund] clients selling into the move,” said Charlie McElligott, a derivatives strategist at Nomura. He estimated that Nvidia on Monday accounted for roughly 10 per cent of all US cash equities’ notional value traded.
