Schwab: Retail investors want AI stocks on the cheap
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Retail investors took advantage of the volatility in the market last month to again be net buyers of stocks, new data from Charles Schwab shared exclusively with Axios shows.
Why it matters: The trade in AI stocks shows staying power, as retail investors repeatedly step in to buy following retreats.
What they're saying: While bullishness toward AI has started to wane, says Joe Mazzola, head trading and derivatives strategist at Schwab, investors "are still interested in it, but they want it on sale."
- Memory chipmakers Micron Technology and Sandisk are examples of AI stocks that have bounced back from selloffs.
Zoom out: Schwab said the heaviest buying activity could be found among its Gen X clients and self-directed traders.
Zoom in: The stock that had the greatest buying interest consistently throughout July was Elon Musk's SpaceX, whose shares started trading on June 12, Schwab's data, released Monday morning, shows.
- Micron and Intel were also among the top net buys.
- Technology as a whole, however, was a net sale for the month, as were financial stocks, while industrials and materials were the only sectors that were net buys.
That echoes data from a rival brokerage, Morgan Stanley's E*Trade, which found among its clients that materials, communication services and industrials had the most net-buying activity.
- E*Trade pointed to mining and rare earth stocks in particular in the materials sector.
By the numbers: The Schwab Trading Activity Index, or STAX, edged up to 59.80 in July, from a score of 59.12 in June.
- Schwab calculates STAX by examining the stock positions and trading activity of millions of its customer accounts.
What we're watching: A separate attitudinal survey by Schwab found that its clients were noticeably less bullish about stocks than they were the previous month.
- While investors cited familiar concerns about the Iran war, inflation, AI valuations and the like, they also pointed to "the perception that August is historically a weaker or quieter month for equities."
