Retail investors return to AI! Citadel Securities: net buying of US stocks reached $9.1 billions last week, third highest chip stock purchases in a year

According to information obtained by Zhitong Finance APP, retail investors who had previously retreated are now returning to their favorite bet: artificial intelligence (AI). According to Scott Rubner of Citadel Securities, last week retail traders on the firm's platform made a net purchase of $9.1 billion in U.S. equities, with a focus on AI-related stocks and exchange-traded funds, even though overall trading activity remains below average levels.

The head of equities and derivatives strategy wrote in a report that this marked the largest weekly net purchase in the past 15 weeks.

Rubner stated that, despite concerns about the sustainability of the AI frenzy dragging down chip stocks, retail investors last week net bought $2.6 billion worth of semiconductor stocks, the third-highest single-week buying volume in the past year. This makes October likely to become the month with the largest net purchase of chipmaker shares on the firm's platform. During the same period, individual traders also bought approximately $2.4 billion in AI infrastructure stocks.

Despite persistent warnings about an AI bubble, funds continue to flow into core AI trades, pushing major indices higher. Both the tech-heavy Nasdaq 100 Index and the S&P 500 Index hit record highs last week.

At the beginning of October, Rubner accurately predicted the trend of retail investors returning to U.S. stocks after a sharp cooldown in September. He pointed out that with the upcoming earnings season and corporate buybacks, October provided a better “re-entry” point for investors to build positions again.

Rubner wrote that the increase in retail purchases was generally driven by “stronger one-sided bullish confidence rather than an increase in trading volume.” Last week, retail buying outpaced selling by 2.7%, with the weekly long-short bias at the 90th percentile, while total trading activity remained at the 42nd percentile over the past year.