It’s no secret that UK investors have been buying Nvidia (NASDAQ: NVDA) stock recently. What’s interesting, however, is that Hargreaves Lansdown data shows that a lot of investors have been investing via a product called the Leverage Shares PLC 3X Nvidia ETP or ‘3NVD’.

So, what’s this product all about? And is it a good way to buy shares in the chip company for my portfolio?

Leveraged exposure to Nvidia

The Leverage Shares PLC 3X Nvidia ETP is a London Stock Exchange-listed exchange-traded product (ETP) that provides exposure to Nvidia stock. However, it doesn’t provide standard exposure to the growth stock.

Instead, it provides three times the exposure to it. In other words, if Nvidia stock was to rise by 1% in a day, this ETP should in theory rise by about 3%.

High risk, high return

Now, the thing to understand about leverage is that it can magnify both gains and losses. So using it can be very risky.

If Nvidia shares were to fall by 5% in a day, this ETP would fall by about 15%. That’s a big loss.

The potential for nasty losses was illustrated earlier this month when Nvidia experienced some volatility. When the company’s share price fell by almost 10% on 3 September, the price of this ETP fell from $50.21 to $35.81. That represents a loss of approximately 29% – ouch!

It’s worth noting that to break even after a loss of 29% one would need to generate a gain of about 41%.

My thoughts

Given the high-risk nature of this product, I won’t be touching it any time soon. For me, it’s far too risky.

That said, I remain very bullish on Nvidia itself. Many people believe this stock is in an AI bubble today. I disagree.

In my view, this is a company with substantial growth potential thanks to its leading position in the AI chip market. And I believe the shares are reasonably valued at present.

For the year ending 31 January 2026 (the next financial year), analysts expect Nvidia to generate earnings per share of $4.02 (I actually think earnings may be way higher than this). That puts the stock on a forward-looking price-to-earnings (P/E) ratio of under 30.

Given that revenue and earnings are projected to grow by over 40% next year, that multiple looks very fair to me.

We are at the beginning of a new industrial revolution.

Nvidia CEO Jensen Huang

I’ll be buying more shares soon

Of course, there are plenty of risks here.

Right now, much of the growth is coming from spending by the other ‘Magnificent 7’ companies. This year, for example, around 45% of Microsoft’s capital expenditure is going to Nvidia.

If these companies were to pull back on their AI spending, Nvidia’s growth could slow and the shares could fall.

Another risk is new AI chips from competitors. At present, many of the Mag 7 companies are working on their own chips.

Given that AI is realistically still in its infancy, however, I see a long growth runway ahead for Nvidia. And while it’s a large holding for me already, I plan to buy a few more shares in the company for my portfolio soon.