Recent trends show a resurgence in retail trading volume for Tesla (TSLA, Financial), particularly around election activities. While this signals growing interest, Nvidia (NVDA) remains the top choice for retail investors. The future preference among these stocks depends largely on their upcoming performances.
Analysts from Vanda Research suggest that Nvidia's upcoming earnings report could be pivotal. If Nvidia's financial results once again exceed expectations, it may solidify its dominance among retail investors. Conversely, if Nvidia's earnings meet market expectations, it might prompt investors to shift focus back to Tesla.
Tesla has historically been a favorite among retail investors. In 2020, Tesla's stock price surged over 740%, fueled by retail enthusiasm. By 2022, Tesla surpassed Apple in popularity among retail traders. However, in 2024, Nvidia overtook Tesla, becoming the most traded stock by retail investors.
The political landscape, particularly with Trump's election victory, has implications for Tesla. Following the election, Tesla's stock jumped 14.8% and currently trades at $321.22 per share. Market analysts, including those from CFRA Research, believe Tesla could benefit significantly from regulatory approvals for autonomous driving technologies under Trump's leadership. There are also considerations about changes to electric vehicle tax incentives, which might advantage Tesla over competitors reliant on such measures.
Despite potential challenges, Tesla's stock could command a higher price-to-earnings ratio due to these developments. Meanwhile, Nvidia's popularity among retail investors has been attributed to its rapid stock price increase and consistently strong earnings reports. Over the past year, Nvidia's stock soared 203%, with the company reporting significantly higher earnings, including a 15% quarterly revenue increase to $30 billion.
