Retail investors sold off the seven technology giants in the US stock market and turned to the new darling of the AI track
If this round of artificial intelligence boom is a gold rush, Alex Cardona chose to avoid the mining spots where everyone gathers and find another way to explore opportunities. It’s this line of thinking that the 50-year-old software executive has invested in AI infrastructure companies, including data center operators. , semiconductor manufacturer Marvel Technology. He has little interest in the "Seven Technology Giants" in U.S. stocks and has only allocated a very small position. Such large-cap technology stocks were once the core force driving the overall rise of U.S. stocks. "I will directly deploy pure track targets like Marvel. Many ordinary investors have never even heard of this small and medium-sized chip company." Marvel is the stock with the highest increase in his portfolio this year, with an increase of more than 120% during the year. “My investment logic is to seize the underlying infrastructure track necessary for AI to run.” Years of fanaticism among retail investors for leading tech giants is cooling. Individual traders buy , Meta, NVIDIA, The intensity of AI continues to weaken, and funds are instead pouring into new AI segmented tracks: memory chip companies such as SK Hynix, or the storage-themed ETF Round Hill Memory. Data from capital flow monitoring agency Vanda Research confirms this trend. There has been a clear shift in the direction of the market: the seven technology giants that once monopolized the market's popularity have temporarily lost their limelight to chip factories, storage suppliers, and a group of small and medium-cap stocks tied to AI infrastructure construction. Only two of the seven giants outperformed the market this year: Apple led the way with a gain of 23% during the year, and Microsoft performed last, with a decline of 19% during the year. Last Friday, the news that China's Dark Side of the Moon AI released a new large model triggered panic in the US stock market, and the risks of chasing subdivided AI targets were completely exposed. Technology stocks in all sectors plunged collectively, with the AI infrastructure sector leading the decline: the Philadelphia Semiconductor Index fell 1.6%, retracing more than 20% from its recent high, officially entering bear market territory. Like Cardona, many retail investors still hold a certain proportion of the stocks of the seven technology giants. The total market value of the seven companies accounts for 36% of the S&P 500 Index. But more and more money is being diverted to less well-known targets, which investors are betting will become the next batch of AI super leaders. Vanda analysts wrote in a research report last week: "Retail investors no longer gather together to buy the seven technology giants. They have begun to independently select winners on the track and lay out their most optimistic targets." Vanda data shows that since July, retail investors have bought a net US$52 million in Microsoft stock, making it the most popular target among the seven giants. In contrast, retail investors have had a net inflow of $52 million over the same period. US$194 million, including US$56 million flowing into AI cloud service provider IREN. In the past few years, ordinary investors have been the most loyal fans of the seven technology giants: in the nascent stage of the AI industry, when in-depth exploration caused market shocks in early 2025, and when the tariff crisis hit U.S. stocks last spring, retail investors continued to increase their positions in these seven leading companies. But now the trend of the Big Seven is seriously divergent. In recent months, individual traders have no longer pursued large companies with trillions of market capitalizations that invest money in AI research and development, but have instead deployed upstream of the industry chain—chip, cooling equipment, and power supply manufacturers. Brett Kenwell, a US investment analyst at eToro, said: "The seven technology giants have been the darlings of the market for many years, and now retail investors are beginning to follow the flow of industry funds upstream and downstream." But this does not mean that retail investors are leaving the stock market. Scott Lubner, head of equity and derivatives strategy at Citadel Securities, said that retail trading activity in May and June set new historical records, and the average daily stock trading volume in these two months was more than double the 2024 average. Even before last Friday's sharp drop, the U.S. AI stock market was already showing signs of weakness: the previously hot semiconductor sector has cooled down, and major U.S. indexes have entered a typical sideways shock phase in the summer. Investors are focusing on second-quarter financial reports, eager to find substantive evidence that corporate AI investment can realize revenue and improve production efficiency. Jonathan Kofsky, fund manager of Janus Henderson's global technology and innovation team, said: "The market needs to see more concrete examples of AI driving revenue and improving production efficiency. To support the current high AI capital expenditures, the entire industry must deliver profitable returns."
All AI concept stocks face the same fundamental test. Last Friday, small-cap chip companies, software companies and the seven technology giants fell simultaneously. For some traders, the potential high returns are worth the risk of volatility. Davis Cantrell, a 19-year-old college student near Atlanta, has been investing for two years and has been tracking leading AI companies for a long time. But recently, he has reduced his holdings in Microsoft, cleared all Nvidia holdings, and switched funds to two tracks where he is more promising: aerospace and quantum computing. He believes that with the implementation of the AI revolution, the two major industries will usher in explosive growth. Cantrell said that the leading technology giants still have investment value, but their main rising market has ended. "I now focus on high-elastic, high-growth track stocks. Microsoft and Nvidia no longer meet this standard."
All AI concept stocks face the same fundamental test. Last Friday, small-cap chip companies, software companies and the seven technology giants fell simultaneously. For some traders, the potential high returns are worth the risk of volatility. Davis Cantrell, a 19-year-old college student near Atlanta, has been investing for two years and has been tracking leading AI companies for a long time. But recently, he has reduced his holdings in Microsoft, cleared all Nvidia holdings, and switched funds to two tracks where he is more promising: aerospace and quantum computing. He believes that with the implementation of the AI revolution, the two major industries will usher in explosive growth. Cantrell said that the leading technology giants still have investment value, but their main rising market has ended. "I now focus on high-elastic, high-growth track stocks. Microsoft and Nvidia no longer meet this standard."