Retail traders are buying the dip in Nvidia and selling the rip in Google
As many tech companies hit the skids in the sessions following the release of Nvidia’s second-quarter earnings, retail traders stepped up to make their most purchases of US single stocks in two months, per JPMorgan.
Retail traders bought $1.4 billion in US single stocks in the five sessions ended September 3, according to strategists led by Arun Jain — with nearly all of the net buying ($1.2 billion) in the $4 trillion chip designer. Tesla and Palantir were No. 2 and No. 3, respectively, on the retail-buying leaderboard. But even the combined retail purchases of those two stocks were only a little more than half of what was seen in Nvidia.
However, the persistent selling that’s pushed shares of the world’s most valuable company below its 50-day moving average seems to be fraying retail’s patience with buy-the-dip strategies.
“While NVDA was still a favorite this week (+$1.2 billion), retail investors’ post-earnings enthusiasm soon faced exhaustion as the stock continued to underperform, with daily purchases declining from $444 million on Aug 28th to $146 million yesterday [Tuesday] and $75 million today [Wednesday],” the JPMorgan analysts wrote.
Meanwhile, retail traders were sellers of the biggest one-day gain in Alphabet since April 9 (the session when US President Donald Trump watered down reciprocal tariffs), with the search giant bolstered by a court ruling in which it avoided worst-case scenarios and had its operational status quo more or less reaffirmed. $154 million in Alphabet was sold by retail, on net, which JPM noted is nearly 3 standard deviations worse than the typical activity from this cohort. Apple, which was also buoyed by the court ruling, saw $190 million in net sales over the past five sessions, an amount not that much below average, per JPM’s calculations.
[Disclosure: I own some Alphabet stock, but it’s not enough to change my life even if it duodecupled.]
