The Zhitong Finance App learned that retail investors who have increased their positions in artificial intelligence (AI) trading core semiconductor stocks in the past week have been hit hard by Thursday's sharp decline. JPMorgan strategist Arun J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. J.P. He quoted trading data from last Thursday to this Wednesday. In a report sent to clients on Wednesday, he wrote that the number of purchases of single technology stocks reached the highest level since momentum trading declined in July.
On Thursday, due to the worsening situation in the Middle East and concerns about huge spending on AI infrastructure construction, chipmakers led the S&P 500 index and the Philadelphia Semiconductor Index plummeted 6.7%, the biggest one-day decline since June.
Stocks most purchased by retail investors include SanDisk (SNDK.US), TSM.US (TSM.US), and Nebius Group (NBIS.US). Nebius Group has recently seen a rise in popularity in retail investment forums. Shares of these companies all fell by at least 4% on Thursday. As of Tuesday, SpaceX (SPCX.US) stock ranked fourth in the retail buying list, but investors chose to sell after the company released encouraging earnings and the stock price rose 7.8% on Wednesday.
Retail investors are not abandoning AI trading and are turning to broader tech stocks
Retail demand for technology exchange-traded funds (ETFs) is stronger. Weekly inflows of tech ETFs reached the second-highest level on record, partly driven by falling purchases late last week. The single-day inflow of technology ETFs hit a record high last Friday, driving weekly buying volume 2.1 standard deviations above the historical average. The Vaneck Semiconductor ETF is one of the funds receiving much attention.
Since the hyperscale data center operator announced strong earnings reports in July, retail investors have been fond of the “Big Seven” stocks. Their move to other stocks shows that as market volatility intensifies, they are not abandoning investments in AI, but are moving to broader tech stocks.
Joe Gilbert, portfolio manager of Integrity Asset Management, said: “As the profits generated by the AI ecosystem last longer than initially anticipated, investors have rotated from the Big Seven to the broader tech sector.”
The technology sector is the main driver of corporate profit growth this year, which has helped maintain investor interest even as market concerns about the AI bubble heat up. According to data compiled by Bank of America, the S&P 500 IT Index component companies expect profit growth of 66% in the third quarter, second only to the energy and communications services sector.
Gilbert added, “Outside of the Big Seven, it is possible to achieve strong profit growth at lower valuations, especially in a high interest rate environment.”
This round of rotation comes at a time when the sell-off in technology stocks is intensifying. The war in Iran led to a sharp rise in energy prices, which once again raised market concerns about rising inflation. On Thursday, the Bloomberg Tech Big Seven Index fell 3.8% after Meta Platforms (META.US) announced plans to increase annual capital expenditure; the Nasdaq 100 index, which is dominated by technology stocks, once fell 3.2%.
However, according to J.P. Morgan Chase data, people's enthusiasm for technology stocks did not translate into a widespread buying boom, and overall retail capital flows remained sluggish during the week.