Investors have flocked to Nvidia-focused exchange-traded funds (ETFs) amid an AI frenzy, with a bullish fund tracking shares of the chip designer achieving an all-time high in Thursday's GraniteShares 2x Long NVDA Daily ETF seeing notable growth, which has attracted significant capital from investors eager to ride the wave of artificial intelligence.

Inflow Numbers and Growth

- Net daily inflows into the GraniteShares 2x Long NVDA Daily ETF reached a staggering $197 million, according to LSEG Lipper data. This record inflow reflects the growing interest in Nvidia as a key player in the AI and high-performance computing space.
- The assets managed by the ETF have surged from $213.75 million at the start of the year to an impressive $1.41 billion. This substantial increase underscores the confidence investors have in Nvidia’s future prospects.

Why It Matters

Risk-averse investors have traditionally shied away from single-currency tracking ETFs, especially those that target short-term returns. But the arrival of these ETFs in the United States. The 2022 market has attracted interest from investors. Leveraged single-stock ETFs seek to maximize returns on the underlying stock in one day, and often use financial derivatives and debt as leverage.

Nvidia's Dominance and Euphoria Around AI

- Nvidia, which controls nearly 80% of the high-end AI chip market, has been on a tear since the start of the year. Buoyed by stellar forecasts and a new boom for AI technology, the stock is up nearly 82%.
- Leveraged ETFs focused on Nvidia have become a favored choice for investors seeking higher returns in exchange for added risk. As a new wave of must-own companies emerges, these ETFs offer exposure to the tech giant’s growth potential.

Impressive Performance

- The GraniteShares 2x Long NVDA ETF, along with other Nvidia-linked ETFs, has witnessed explosive growth. Assets of these funds have multiplied between five and 11 times since the start of 2024.
- Year-to-date, their prices have soared between 143% and 218%, outperforming many other ETFs in the market.

Top ETFs during the past Month

Tracking the top ETFs for the past month is a good way to discover hot sectors and to find funds to invest in for the next month’s period. Past performance doesn’t guarantee future performance as we all know. But if the underlining technical trend hasn’t ended and the fundamental reason for the sector’s appreciation, then investing in that ETF or related sector stocks can be profitable.