Nvidia’s Surge Leaves T-Rex 2X Inverse ETF Investors in the Dust

Investors in the T-Rex 2X Inverse Nvidia Daily Target ETF NVDQ are facing major losses, as shares of Nvidia Corp. NVDA, led by CEO Jensen Huang, have soared in value.

Benzinga Pro reports that the T-Rex ETF has plummeted by a staggering 96% in investor wealth over the past year. In sharp contrast, Nvidia’s stock has surged by 221.08% during this same period.

Understanding the T-Rex ETF’s Unique Strategy

It’s important to note that the T-Rex ETF is structured to achieve daily inverse results. This means its long-term performance does not directly reflect Nvidia’s stock trends. The ETF aims for a daily return that is 200% of the opposite of Nvidia’s daily performance, distinguishing it from conventional ETFs.

Simply put, the ETF gains value when Nvidia’s stock price declines and loses value when Nvidia’s price rises. It employs derivatives, including options and futures, to position itself against Nvidia’s stock performance.

Nvidia’s Bright Future Amidst ETF’s Struggles

In the meantime, Nvidia remains a dominant player in the chip industry. Its shares closed at $138 on Friday, up 0.8%, pushing its market capitalization past $3 trillion. Analysts like Ram Ahluwalia from Lumida Wealth Management are optimistic about Nvidia’s growth potential, predicting it could reach a $4 trillion valuation due to strong demand for GPU chips.

Furthermore, Dan Niles of Niles Investment Management predicts that Nvidia’s revenues and stock could potentially double in the coming years, driven mostly by investments in AI. Additionally, Goldman Sachs and Bofa Securities have raised their price targets for Nvidia, reflecting their confidence in the company’s ongoing growth prospects.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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