The Zhitong Finance App learned that the latest research report released by J.P. Morgan Chase shows that as US stocks entered October, retail investors' trading sentiment began to improve, and capital was flowing back to the technology sector, especially stocks related to artificial intelligence (AI), semiconductors, and memory chips. Although rising US bond yields, geopolitical risks, and fluctuations in oil prices have kept the market cautious, retail capital flows have shown signs of recovery. Nvidia (NVDA.US) became the most popular individual stock among retail investors last week, with a net purchase volume of US$834 million. SanDisk (SNDK.US) and Micron Technology (MU.US) are also at the top of the buying list.
J.P. Morgan notes that historically, retail investors' trading activity was usually most active in the first quarter of each year, while the third quarter was relatively sluggish. As September comes to an end, the pressure on seasonal outflows appears to be fading. Recently, retail capital inflows have rebounded from September lows, and trading activity has gradually returned to near the average level of the past 12 months.
However, the overall capital inflow is still slightly below the historical average. The report shows that in the week of October 1 to 7, net purchases of stocks and ETFs by US retail investors totaled 5.7 billion US dollars, which is lower than the average of 6.7 billion US dollars per week over the past 12 months. Among them, the net inflow of ETFs was 4.7 billion US dollars, and the net inflow of individual stocks was 1 billion US dollars, indicating that retail investors are still more inclined to participate in the market through ETFs.
Technology stocks have once again become the focus of retail capital chase. According to J.P. Morgan Chase data, ETF capital inflow activity in the technology industry has risen to the 73rd percentile of historical distribution, while it was only at the 4th percentile four weeks ago, reflecting a marked recovery in retail investment interest in the technology sector.
This round of capital return was not only concentrated on the “Big Seven” of US stocks, but also spread to other technology companies. The semiconductor and hardware sector continues to be favored by capital, and net purchases of software stocks have reappeared, indicating that retail optimism about the technology industry is growing.
Specifically, Nvidia received about US$834 million in net purchases from retail investors last week, ranking first among all individual stocks. Google's parent company Alphabet (GOOGL.US) ranked second with US$265 million, SanDisk ranked third with US$150 million, Micron ranked fourth with US$135 million, and Seagate (STX.US) ranked fifth with US$129 million.
Other big tech stocks also received capital inflows. Tesla (TSLA.US) received net purchases of about US$122 million last week, Amazon (AMZN.US) received US$81 million, and Microsoft (MSFT.US) received US$34 million. In contrast, Apple (AAPL.US) received a net sale of approximately $15 million.
It is worth noting that although SpaceX (SPCX.US) stock price rose by about 15% last week, retail investors continued to reduce their holdings of the stock, and the net sales volume reached 177 million US dollars, making it the most sold individual stock this week. J.P. Morgan pointed out that after going public, SpaceX attracted retail investors to establish large holdings. The recent rise in stock prices has prompted some investors to make a profit, but since entering October, the rate of reduction in holdings has slowed down.
SpaceX's recent market attention continues to heat up. In addition to progress in Starship test flights and Starlink satellite deployment, market sources also say that the company is seeking to raise about 40 billion US dollars to purchase Nvidia chips to expand the AI system. Musk previously said that the number of Nvidia chips used in Colossus 2 could double before the end of the year.
In addition to SpaceX, Intel (INTC.US) had net sales of about US$148 million from retail investors last week, and Maywell Technology (MRVL.US), ultra-microcomputer (SMCI.US), and Moderna (MRNA.US) also ranked among the five largest net sales stocks.
Looking at the industry as a whole, retail investors' preferences for tech stocks are in stark contrast to other sectors. In addition to the technology industry receiving a net inflow of about US$602 million and the industrial sector receiving a net inflow of about US$143 million, other major industries generally received net sales. Among them, the communications services sector had a net outflow of about US$231 million, a net outflow of US$184 million from the financial sector, and a net outflow of US$153 million from the healthcare sector.
Meanwhile, retail interest in financial stocks remains limited. J.P. Morgan Chase pointed out that although large banks have lagged behind recently, and as the market raises expectations for interest rate hikes by the Federal Reserve, banks' net interest income prospects have improved, and trading business revenue may remain strong, retail investors have not clearly taken advantage of the low level to buy financial stocks.
As the third quarter earnings season begins, corporate profit performance may become the next key factor affecting retail capital flows. According to consistent market expectations quoted in the J.P. Morgan Chase report, corporate profits for the third quarter are expected to increase 31% year over year, and increase 27% after excluding the energy sector; revenue is expected to increase 12% year over year and 11% after excluding the energy sector.
The report points out that the profit growth rate of all industries is expected to improve compared to the same period last year. Among them, the energy and technology sectors are expected to lead the way, while the essential consumer goods sector is expected to lag behind. However, the profit forecast for the full year of 2026 has continued to be lowered since the beginning of September, which means that the market still needs to pay attention to whether corporate performance can meet the higher growth expectations.
J.P. Morgan believes that as the third quarter earnings season approaches, the return of retail capital to technology stocks, the resumption of ETF trading activity, and the continued strong momentum of US economic growth have all provided some support for market sentiment. However, US bond yields, oil prices, and the geopolitical situation may still affect investors' risk appetite. Whether the technology sector can continue the trend of capital inflows will depend on upcoming corporate performance and changes in the macroeconomic environment.