Retail investors are on track for a third consecutive day of net selling across single names, a phenomenon that hasn’t been seen since March 2020. The selling has become increasingly concentrated in semi names and AI winners, with our top two theories being the growth in AI expenditure peaking and retail investors looking to build dry powder ahead of upcoming listings from SpaceX, Anthropic, and OpenAI.

According to Vanda Research, the shift to cheaper models may be a factor in the peak in AI expenditure growth, while retail investors may be eagerly awaiting the opportunity to invest in these cutting-edge companies. The concentration of selling in semi names and AI winners suggests that investors are becoming more selective in their investments, focusing on companies with strong growth potential.

The recent surge in retail investor activity in the tech sector may also be driven by the increasing popularity of online trading platforms and the ease of access to financial markets through these platforms. As a result, more individuals are participating in the stock market, leading to increased volatility and liquidity.

It will be interesting to see how this trend plays out in the coming days and weeks, as retail investors continue to drive the market. Will they continue to favor AI and semi names, or will their attention shift to other sectors? Only time will tell, but one thing is certain: the retail investor is a force to be reckoned with in the world of finance.