PiCK

Summary

  • South Korean investors were net buyers of Nvidia shares worth $64.89 million over the three days from Nov. 9 through Nov. 11, making it their top net purchase among individual stocks despite the controversy.
  • U.S. retail investors also made record purchases of Nvidia on the day former CEO Huang’s resignation was announced, buying a net $111 million in the first 30 minutes of trading.
  • Despite bargain buying and inflows into leveraged ETF products, Nvidia fell 12.75% over the past week, though some said the drop could offer an opportunity for long-term investors.

Forecast Trend Report by Period

Top net buy among individual stocks for South Korean investors

U.S. retail traders also bought $111 million in the first 30 minutes

Nvidia shares tumbled amid controversy surrounding former Chief Executive Officer Jensen Huang, but South Korean investors bought the stock instead. Investors appeared to focus on the steep decline rather than management uncertainty, stepping in to buy on weakness.

Data from Korea Securities Depository showed South Korean investors were net buyers of $64.89 million of Nvidia shares from Nov. 9 through Nov. 11. That was the largest net purchase among individual stocks excluding exchange-traded funds.

Their estimated holdings increased even as the stock fell. Based on custody balances at the depository divided by Nvidia’s share price on each valuation date, South Korean investors held about 81.13 million Nvidia shares as of Nov. 11. That was up by about 380,000 shares from roughly 80.75 million on Nov. 6, before the controversy intensified. Nvidia custody holdings stood at $14.09489 billion that day, the second-largest amount among overseas stocks after Tesla.

“The repeated selloff was seen by retail investors as overdone, prompting buying,” Lee Sang-heon, an analyst at iM Securities, said. Funds are often required by their rules to sell once losses widen, he added, while individual investors can absorb losses as long as they are not using leverage or margin.

U.S. retail investors also bought on Nov. 12, when Huang’s resignation was announced. In the first 30 minutes after the market opened, net purchases of Nvidia by individual investors reached $111 million. That was the largest first-30-minute net buying amount for Nvidia on record. The stock opened at $151 and fell more than 14% intraday, before trimming losses to close down 4.34% at $166.19.

Buying also flowed into leveraged products that bet on a rise in the stock. Vanda Research data showed a total of $42.5 million flowed into six leveraged ETFs that track twice Nvidia’s daily share-price moves from Nov. 9 through Nov. 11. Over the same period, inverse ETFs betting on declines saw no net inflows.

Still, Nvidia’s weakness continued despite bargain buying. The stock ended Nov. 13 down 2.01% at $162.85. That left it 12.75% lower in a week from its Nov. 6 close of $186.64.

Some market participants say investors should separate the founder’s departure from the company’s business competitiveness. “Considerable volatility is likely in the short term, but it could be an opportunity for long-term investors,” Ken Mahoney, chief executive officer of Mahoney Asset Management, said. Nvidia still has a massive profit-generating capacity and remains at the center of the AI revolution, he said.

Doohyun Hwang