Small investors bought the dip in Nvidia by a record amount Monday

Retail investors rushed into Nvidia on Monday, signaling Main Street support for the chipmaker despite the emergence of an artificial intelligence model from China that battered its shares and caused a historic, $600 billion loss in market value.

Everyday traders bought more than $562 million worth of Nvidia shares on balance Monday, according to data from Vanda Research that subtracts total outflows from inflows. That marked a record for daily net inflows into Nvidia as mom-and-pop investors bucked their institutional counterparts, who dumped the stock en masse.

The buy-in from individuals came as Nvidia suffered its biggest one-day loss, tumbling around 17%, since the onset of the Covid pandemic in March 2020.

Monday’s plunge came in the wake of news that an AI model from Chinese startup DeepSeek scored high performance marks more cheaply and in far less time than Western counterparts.

The development raised doubts about the U.S. strategy of spending huge sums on AI and the data centers they require, just as President Donald Trump last week announced a multi-billion dollar AI project called Stargate. The sudden rise of DeepSeek also rang alarm bells that America may not lead in AI technology, offering chilling reminders of what some described as a “Sputnik moment” at the dawn of the Space Race.

Nvidia told CNBC on Monday that DeepSeek’s model was an “excellent AI advancement.” DeepSeek’s offering reportedly outperformed the best models of OpenAI and other U.S. competitors, further stoking concerns about the status of the U.S. in AI.

For their part, however, individual investors were unfazed. Data from Vanda shows the chipmaker was the most-purchased security by average investors on net in 2024 — surpassing even the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500.

One of the buyers on Monday was Nirav Patel. The technology manager said he spent hours testing DeepSeek’s model and concluded that, while development costs have come down, more chips will be needed to handle the increase in demand that should accompany growing affordability.

“In my opinion, you will see much higher adoption of reasoning AI models,” Patel said. “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 monolithic Wall Street, as happened during the meme stock craze that captivated U.S. markets during the pandemic. The difference now being that individuals can’t swing the price of Nvidia, with a market value Tuesday near $3 trillion, the way they could small-cap stocks such as video game retailer GameStop or movie theater chain AMC four years ago.

Despite the contrast in size, there were similar overtones on Monday, however. Nvidia was the most-mentioned stock on the popular WallStreetBets Reddit forum over the past 24 hours, with mentions surging more than 175% as its shares plunged, according to Quiver Quantitative data as of Tuesday morning.

One Reddit user posted a photo of their Nvidia position on the WallStreetBets forum with the title “in Huang we trust,” a reference to Nvidia CEO Jensen Huang. Another said Monday’s moves were a “classic overreaction” and “missed the bigger picture.”