Retail investors seek to buy the dip on US megacaps -Vanda Research

By Lewis Krauskopf

NEW YORK (Reuters) – Retail investors appear to be eager to buy up shares of the big U.S. tech and growth stocks that have been under pressure from mixed earnings results and rising bond yields, according to Vanda Research.

Massive gains in megacap stocks, such as Apple, Nvdia and Microsoft, have helped drive equity indexes higher this year, but the group has faltered lately.

The latest weekly data from Vanda showed retail net buys of nine big tech and growth stocks reached 31% of total flows, after being below 30% for most of the month. The latest level is still below the 37% of flows the group reached earlier this year.

“Individual traders have scope to ramp up purchases in these names as a share of total flows; that could support the tech sector, as well as the overall market should it materialize,” Vanda said in a note.

More specifically, retail traders appeared to gravitate toward those megacap stocks which sold off after their earnings reports, according to Vanda. That included buying in shares of Tesla, Alphabet and Meta Platforms — which all fell following their respective reports — and selling Microsoft, which rose after its earnings.

“Retail’s immediate reaction was clearly opportunistic as they net sold AI-leader MSFT to rotate into GOOG and META,” Vanda said in a note. “Similarly, TSLA experienced contrarian buying last week.”

(Reporting by Lewis Krauskopf; editing by Jonathan Oatis)