Retail traders are dumping the Magnificent 7, and their flood of money into the stock market has slowed to a trickle
Analysts found investors are dumping US tech megacaps, especially Nvidia.
Retail traders have gone from “buy the dip” to just waving “bye” to the Magnificent 7.
A team of JPMorgan analysts led by Emma Wu highlights that retail traders sold a net $3.2 billion of Nvidia stock in the week ending Wednesday, when the company reported Q1 results. The crowd continues to dump the chip designer, with Wu flagging this as “the longest selling streak since September 2018.”
Tesla was in the second spot in terms of the weekly retail exodus at the single-stock level, though billions shy of Nvidia in this inauspicious loserboard.
“Their positioning compared to the large-cap benchmark suggests they have been decreasing their portfolio weights in the Discretionary and Tech sectors since May,” JPM’s analysts wrote. “In fact, their portfolio weights in Mag7 have declined significantly over the past year, from 10% last summer to ~1.5% recently.”
And overall, the flood of retail money into the stock market has sharply slowed to a trickle.
“Over the past week, retail traders net bought +$140 million, marking the smallest weekly imbalance this year,” Wu wrote.
