To The Moon

Trading in AI stocks is back in vogue after April 2025's tariff rout.

However, retail investors’ purchases are taking a new twist. 

According to Vanda Research, Vice Presidents - Marco Iachini and Lucas Mantle : a recent analysis of retail investor flows by at Vanda Research.

• There has been a clear shift away from Mag 7 stocks, following April’s Liberation Day tariff announcement.

• The surge in dip buying has flow into (a) 2nd-derivative AI laggards and (b) other higher-risk opportunities, instead.

• Purchases of leveraged ETFs, that double or triple Nvidia's daily return, slumped to a 1-year low in May 2025, though options trading shows no signs of bearish positioning.

• Both Lachini & Mantle interpreted this as classic profit-taking.

$NVIDIA(NVDA)$, a favorite among retail investors over the last few years, saw large outflows starting in mid-May 2025 after shares jumped on easing tensions between the US and China.

Even Nvidia’s CEO, Jensen Huang sold some of his Nvidia shares over a 2-day period on Fri, 20 Jun 2025 and Mon, 23 Jun 2025.

A total of 100,000 shares have been sold in the open market, as part of an advanced, prearranged trading plan. (see above)

Mag 7 - YTD Performances.

Most of the Magnificent Seven stocks are down since the start of 2025, but nearly the entire group has sharply rebounded from early April's tariff panic, thankfully. (see below)

Of the 7 stocks’ only 3 (Meta Platform, Microsoft & Nvidia) stay above the zero mark.

As of end 25 Jun 2025, the rest are still trending below the zero mark - (a) Amazon (-1.90%), (b) Alphabet (-8.86%), (c) Apple Inc (-17.84%) and (d) Tesla Motors (-13.48%)

Retail investors who bought the dip are likely locking in profits from these "core portfolio holdings."

New kids on the block

New “Favourites”.

Although investors are pivoting from the Magnificent Seven, they are not abandoning the AI trade though.

They are instead, piling into smaller data center stocks like:

• $Navitas Semiconductor Corp(NVTS)$.

• $CoreWeave, Inc.(CRWV)$.

• Applied Digital Corp (APLD).

The best part of it is, above 3 companies are affiliated with Nvidia and over the past month, retail investor purchases of each increased by more than 150%. 

Other Purchases.

Mom-and-pop traders have also been big buyers of quantum computing stocks, reflection of their substantial risk appetite.

In the last week of May 2025, retail investors bought more $D-Wave Quantum Inc.(QBTS)$ ($6 billion market cap), than they did UnitedHealth Group (UNH) ($275 billion market cap).

In the time that investors bought a net $17 million of Meta (META) stock, they funneled $25 million into $Rigetti Computing(RGTI)$. 

Iachini & Mantle noted it's common for retail investors to venture into riskier corners of the market after a successful bout of dip-buying.

Uncertainty about tariff policy and the economic outlook remain despite the market's recent rebound.

The market's risk appetite was on full display Tue, 24 Jun 2025, with the small-cap Russell 2000 and tech-heavy Nasdaq leading US stock indexes higher, with the S&P 500 strayed to just 0.85%, away from its all-time-high (ATH).

The optimistic rally soured the next day when the “high” from Israel-Iran cease-fire began to thin out.

As of 25 Jun 2025

Shares of Navitas Semiconductor were up nearly +20% in recent trading, while CoreWeave advanced +12%. Their past month performances are nothing short of “wow”, considering how “new” to the scene they are. (see above)

My Viewpoints : (mine only)

If you noticed most Mega cap stocks’ prices do not fluctuate in peak and troughs, a ±20% is already considered drastic.

Yet for stocks like APLD, CRWV & NVTS - they are soaring like there is no tomorrow.

Not that it is impossible, provided the company has the right fundamentals.

However, with ongoing big-picture risks, it feels like we are near the end of the current stock market rally, and it may not last much longer.

Especially not when the final US’s Q1 2025 Gross domestic product (GDP) report, fared “worse” than its first 2 preliminary readings of -0.3% and -0.2%, published in April & May 2025. (see below)

So, take profit while you are still ahead OR hawk over the shares religiously and flee at first sign of correction. Does this apply to NVDA ? I am unsure as its bubbling upwards lately… Mmm…

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

• CYN Soars on Nvidia Partnership: Invest ? Fri, 27 June. Picked post.

• Trump's Tax Bill : Crash Market & Investors Flee ? Fri, 27 June. Picked post.

• AI stocks to fuel US Market rally again ? Thu, 26 June. Picked post.

• Do you think US market will continue to rally for the month of June 2025 ’?

• Do you think it makes sense to continue to bet on newbies favourite (APLD, CRWV, NVTS) despite their brief history and existence ?

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