Retail Investors Rally Behind Nvidia Despite AI Model Threat
Retail investors poured over $562 million into Nvidia shares on Monday, despite the company’s stock plummeting 17% in response to an artificial intelligence model from China that raised concerns about the US’s position in AI technology. This marked a record for daily net inflows into Nvidia, with individual investors bucking institutional counterparts who sold the stock en masse.
The AI model from Chinese startup DeepSeek scored high performance marks more cheaply and in far less time than Western counterparts, raising doubts about the US strategy of spending huge sums on AI and the data centers they require. However, individual investors were unfazed, with some even viewing the development as a positive sign for Nvidia’s future growth.
“I think you will see much higher adoption of reasoning AI models,” said Nirav Patel, a technology manager who bought Nvidia shares on Monday. “With adoption, you need more compute, and so you’ll need more Nvidia chips basically.”
The show of support from small-scale traders is the latest example of retail investors diverging from Wall Street, similar to the meme stock craze that captivated US markets during the pandemic. While individual investors cannot swing the price of Nvidia in the same way they could with small-cap stocks, their enthusiasm for the company was evident on the popular WallStreetBets Reddit forum, where Nvidia was the most-mentioned stock over the past 24 hours.