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GraniteShares reports 978.75% return on long positions on leveraged Nvidia ETP


Nvidia’s market cap surge to more than USD3 trillion making it the second most valuable company in the world almost equals the entire UK stock market, GraniteShares says.

The chipmaker now has a bigger market capitalisation than Apple, and is only exceeded currently by Microsoft, with its share price up around 148 per cent year to date boosted by strong revenue growth of 262 per cent in its first quarter earnings.

Investors going long on Nvidia through GraniteShares 3x Long Nvidia Daily ETP (3LNV) have seen returns of around +978 per cent year to date and +1,352 per cent in the past 12 months. GraniteShares writes that eturns over the past four years since the launch of ETP “have been an incredible +7,480 per cent. The compounding effect associated with daily leverage has boosted the performance, given the long positive trend of the stock.”

GraniteShares points to convincing reasons for continued growth – Nvidia’s chips underpin all of the most advanced AI systems and it has an estimated market share of more than 80 per cent in a fast-growing sector. It is expanding into other product sectors related to data centers, including central processing units and networking equipment, as well as subscription software and cloud services.

Spending on artificial intelligence hardware, software, and services is projected to increase at 36.6 per cent annually until 2030, according to analysts, providing long-term support for Nvidia earnings and share price, GraniteShares believes.

But the share price could come under short-term pressure as Nvidia completed its sixth 10 for one stock split, and at least historically, share price performance has suffered after previous stock splits, dropping an average 23 per cent in the following year.

GraniteShares writes that is potentially creating opportunities for investors going short on the stock in the short term, although it should be said that previous stock splits happened when the US economy was weaker or in recession, with consequences on the overall market. In fact, GraniteShares is seeing growing demand for its 3x Short Nvidia Daily ETP (3SNV), which provides 3x leveraged short exposure on the stock, for tactical investing but also for hedging purposes.

Will Rhind, Founder and CEO of GraniteShares, says: “Nvidia remains one of the great stock market success stories – around 10 years ago it had a market cap of USD10 billion and is now valued at more than USD3 trillion. It is impressive to think that the market cap of the chipmaker is now very close to the one of the entire UK stock market.

“On its own Nvidia has accounted for more than a third of the positive performance of the S&P 500 index this year. It is out on its own in supplying the hardware for AI as well as the software tools to build AI applications, which are destined to have an increasingly significant impact on the lives of all of us, and whose potential we’ve only just begun to explore.

“Fundamentals are very strong, and forecasts for spending on its core products should mean Nvidia will remain in a leadership position for years to come, creating opportunities for investors going long on the stock, who can substantially amplify returns thanks to our 3x long ETP.

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