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Nvidia surpasses Tesla as the most traded stock on Wall Street

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Nvidia surpassed Tesla as the most traded stock on Wall Street, further solidifying its importance after becoming the third-most valuable U.S. company. This highlights the increasing significance of AI-related investments to investors.

However, Nvidia’s dominance in daily trading could expose investors to risk if the chipmaker’s revenue growth doesn’t meet lofty expectations, potentially deflating the Wall Street rally driven by AI optimism.

The chip designer’s shares dropped by almost 6%, mirroring a 2.5% decline in the broader Philadelphia semiconductor index, which was also dragged down by losses in other chip stocks.

Nvidia’s quarterly report on Wednesday is highly anticipated on Wall Street this week. Analysts suggest that anything less than an exceptional report could halt Nvidia’s remarkable 47% stock surge in 2024.

Over the last 30 trading days, around $30 billion worth of Nvidia shares were traded daily, surpassing Tesla’s average of $22 billion per day. Historically, Tesla had been the dominant stock in daily U.S. trading since 2020, with turnover peaking above $35 billion multiple times, according to LSEG data.

Dennis Dick, a trader at Triple D Trading in Ontario, Canada, suggests that Nvidia’s prominent role in trading signals the beginning of a new trading era akin to the internet’s dawn.

However, Dick cautioned that the exceptionally high trading volumes in AI-related stocks indicate that retail investors and algorithmic traders are propelling prices upwards primarily through momentum trading rather than fundamental factors like anticipated revenue growth.

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