① There are signs that many investors trying to stand at the head of the AI frenzy are increasingly favoring an ETF that is twice as long as Nvidia;
② The ETF's trading volume and net capital inflow have both recently hit record highs.
Despite the AI investment boom led by Nvidia, the debate over whether there is already a bubble is still in full swing. However, for many aggressive market participants, it seems that Nvidia's current growth alone is not enough to satisfy them...
There are signs that many investors trying to stand at the head of the AI frenzy are increasingly favoring an ETF that is twice as long as Nvidia and driving the ETF's trading volume and net capital inflow, both of which have recently reached record highs.
According to the data, after receiving a record net inflow of US$252 million last week, Nvidia's GraniteShares2x Long NVDA Daily ETF was doubled on Monday ($GraniteShares 2x Long NVDA Daily ETF (NVDL.US)$)'s transaction volume has once again reached the second-highest level in history.
Nvidia, the leading stock in the global AI chip sector, fell another 2% on Monday, continuing its sharp decline of more than 5% last Friday. And this rare decline in chip stocks, which are currently popular, has also triggered a new round of intense competition between the bulls — the bulls see it as a good opportunity to buy after adjustments, while the bears see this adjustment as a sign of the beginning of a bubble.
As the name suggests, NVDL provides investors with a return rate twice that of the multi-bid stock Nvidia. Since its launch at the end of 2022, the fund size has grown to 1.4 billion US dollars. In the market, there are still quite a few Nvidia derivatives with a similar layout like NVDL. Because more and more people are convinced that the AI era “seller” led by Huang Renxun is leading profound technological changes in the global economy, this will create new opportunities for wealth creation in the stock market.
On Friday, when Nvidia dropped nearly 6%, NVDL's trading volume hit a new high of over $2 billion. Investors made a net investment of US$102 million into the fund on the same day, probably betting that Nvidia's stock price could be reversed in the short term.
Dave Lutz, head of ETFs at JonestTrading, believes that given the large volume of NVDL transactions, NVDL trends have even become a key indicator of retail investor sentiment and activity.
Meanwhile, according to Markit Securities, the fund's short ratio is very low, only 1.5%.
On Tuesday, when key CPI data from the US Department of Labor is released, Nvidia's resilience in this bull market will undoubtedly face further tests. Will the CPI data cause it to be negative three times in a row? It is becoming the focus of some industry insiders.
Looking at overall returns, NVDL's return so far this year is as high as 156% — the second-best performing ETF in the US market in 2024. The best-performing ETF was also a fund that doubled Nvidia's — the $269 million T-Rex 2X Long NVIDIA Daily Target ETF ($T-REX 2X LONG NVIDIA DAILY TARGET ETF (NVDX.US)$) increased by about 179%. Until mid-January, NVDL was still a 1.5 times larger fund, which is the reason why its performance temporarily lags behind.
And even after two consecutive days of decline, Nvidia's AI chip leader has risen more than 70% so far this year, far leading the S&P 500 constituent stocks.
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