The GraniteShares 2x Long NVDA Daily ETF (NVDL) has seen a surge in trading volumes and inflows to record highs as investors flock to this exchange-traded fund (ETF) for exposure to Nvidia (NASDAQ:NVDA) stock. With trading volumes and inflows hitting unprecedented levels, NVDL recently underwent a 6 for 1 stock split, following the accumulation of over $1 billion in assets year-to-date. This strong interest in NVDL coincides with the relentless growth of NVDA stock, which has recently breached the $900 mark. As NVDA continues to deliver robust financial performance and solidify its position as a leader in AI technology, investors are increasingly optimistic about its future prospects. Against this backdrop, speculation has emerged regarding the possibility of Nvidia considering a stock split, a move that could enhance liquidity and accessibility for investors. Overall, the soaring popularity of NVDL and the ongoing success of NVDA underscore the bullish sentiment surrounding AI-related investments and Nvidia’s pivotal role in driving innovation in this space.
Nvidia ETF split announced
Last month, GraniteShares, a global ETF issuer, announced a 6 for 1 forward stock split for the NVDL ETF, which is specifically designed to provide investors with double the daily return of Nvidia stock. This split, effective as of March 13, did not impact the total market value of the outstanding shares but led to a significant increase in the number of outstanding shares, approximately by 500%.
The NVDL ETF, often referred to as the Nvidia ETF, has experienced a surge in assets, reaching $2 billion, driven by growing investor enthusiasm for AI companies. In 2024 alone, the fund has attracted a staggering $1.02 billion in investments, with a notable influx of $545.8 million on March 11, according to etf.com. Bolstered by an almost triple price increase this year, the ETF’s assets under management soared to $1.98 billion by early March 13, as indicated by Bloomberg data. NVDL has surged over 170% year-to-date, reflecting the ongoing rally in Nvidia stock. Nvidia’s shares have already climbed by 75%, fueled by heightened demand from tech companies seeking high-end semiconductors tailored for AI applications.
Sumit Roy, a senior analyst at etf.com, commented on the remarkable growth of NVDL, stating, “It took less than two weeks for NVDL to go from $1 billion to $2 billion in AUM, which is an insanely rapid ascent. About 70% of the increase was a result of inflows, while the rest came from the continued surge in shares of Nvidia, and by extension, NVDL.”
Nvidia stock split next?
Aside from the NVDL ETF, there is growing speculation among market participants regarding a potential stock split in Nvidia itself.
Ken Mahoney, CEO of Mahoney Asset Management, recently expressed to Bloomberg News his anticipation of a stock split in the chip giant within the next year.
“Probably in the next year or so, I expect the stock to split and that would be able to get some small retail investors into the stock where they think it’s out of reach right now,” Mahoney remarked. The last time Nvidia announced a stock split was in May 2021 when its shares were trading around the $600 mark. In executing a four-for-one split, the company’s stated intention was to “make stock ownership more accessible to investors and employees.”
Stock splits are often employed by companies to reduce the share price, making it more attractive to a broader base of investors.
This strategic move aims to enhance trading activity and boost the stock’s liquidity, facilitating swift trade executions—an essential consideration for institutional investors engaging in large-scale transactions.
Heightened investor optimism, which drives stock prices higher, can prompt discussions about a split, influenced by prevailing market sentiment and speculative tendencies.