US retail trading activity and AI-linked technology sentiment Report Interpretation

Overview

This RetailRadar issue examines US retail trading activity for the week through August 5. JPMorgan attributes a marked improvement in technology sentiment to hyperscaler earnings, while identifying a split in retail behavior: profit-taking in stocks that surged after results, alongside renewed interest in AI-related semiconductor, hardware and technology-ETF exposure.

Core views

Hyperscaler earnings were the report's central sentiment catalyst. JPMorgan says the earnings-driven technology rebound lifted the S&P 500 to new highs and paused the Momentum Unwind. Aggregate retail flows remained muted at the 4.4th percentile versus the prior year, up from the 0.8th percentile the previous week. Single-stock flows were still weak at the 3.6th percentile, versus 3.2th percentile previously, while ETF inflows improved to the 38.5th percentile from the 1.6th percentile. The institution interprets this as a rotation rather than broad risk aversion: selling in individual shares was concentrated in hyperscalers and software after sharp post-earnings gains, whereas buying resumed in memory, semiconductors and technology ETFs. Retail investors were net sellers of individual equities for four consecutive days. Flows were generally positive intraday but reversed during the afternoon, ending in net selling. JPMorgan contrasts this with the July 27–29 de-risking episode, when retail investors sold both intraday and into the close, suggesting the latest activity was more consistent with gain-locking following earnings-driven price appreciation. Software experienced its largest weekly retail outflow on record. Microsoft recorded its largest July 30 retail outflow versus one-year history at -4.2z. Palantir was bought on its announcement date at 1.6z, then saw profit-taking at -4.0z on August 4, its fastest pace in nearly a year. Among hyperscalers, weekly selling was pronounced in Amazon at -2.4z, Microsoft at -3.0z and Google at -1.2z, while Meta saw slightly positive flows at 0.7z. Amazon and Microsoft ranked as the two most sold stocks of the week. Amazon illustrates the earnings-and-profit-taking pattern. Its shares had risen about 17% over the prior week after it reported the fastest AWS growth in 18 quarters, while backlog rose nearly 2.5 times year on year on stronger core-workload and AI demand. The company raised its capital-expenditure outlook to roughly $220B. In the more detailed earnings discussion, JPMorgan cites 37% AWS growth, a $496B backlog, and management's view that AI-investment returns on invested capital are compelling. Retail investors nevertheless sold $259.2M of Amazon on July 31, a -5.0z imbalance. Hardware and memory regained favor after a brief pause. SanDisk and Apple led renewed inflows at 1.4z and 1.9z respectively; SanDisk also saw 1.2z of pre-earnings buying on Wednesday. Micron received 0.6z of inflows, while AMD became the top-bought name on Wednesday at 3.0z after its shares fell 7% following earnings. AMD's results beat and raised relative to consensus, although next-quarter guidance was modestly below the buy-side bar, particularly on gross margin. JPMorgan highlights management's CY27 data-center outlook for server CPU revenue growth above 70% year on year and data-center segment revenue growth well above 100% year on year. At the aggregate level, retail flows totaled $3.5B for the week, materially below the $6.8B 12-month weekly average. Investors favored ETFs, buying $5.0B, over single stocks, which saw $1.6B of net selling. Broad large-cap equity ETFs received $1.5B. Technology-sector ETF buying was $315M, while fixed-income multi-sector, dividend-style equity and precious-metals commodity ETFs received $225M, $201M and $149M, respectively. Technology ETF flows normalized from -2.2z to +1.3z, led by SOXX at 2.0z, SMH at 2.8z and SOXS at 1.4z. Gold ETFs were also popular on Wednesday as gold prices rose 4%, with GLD and GLDM each at 1.1z. Within the Magnificent Seven, retail investors bought Tesla (+$372M), Meta (+$278M), Apple (+$131M), Alphabet (+$7M) and Nvidia (+$89M), while selling Amazon (-$349M) and Microsoft (-$485M). Outside that group, technology attracted +$617M, whereas financials (-$706M), consumer discretionary (-$499M) and health care (-$307M) were net sold. The five largest retail inflows were Tesla (+$372M), AMD (+$326M, 2.6z), SanDisk (+$323M, 1.4z), Meta (+$278M) and Micron (+$247M); the five largest outflows were Microsoft (-$485M, -3.0z), Amazon (-$349M, -2.4z), Palantir (-$190M), SoFi (-$104M, -3.6z) and Nebius (-$95M, -2.5z). The report also tracks retail activity around earnings and social-media attention. SanDisk and Western Digital both fell after market despite strong earnings because guidance was softer than expected; retail bought $85.8M of SanDisk and $7.5M of Western Digital on August 5. Palantir rose 29% after lifting full-year revenue guidance and beating quarterly expectations, but retail sold $181.9M on August 4. Arista delivered a quarterly beat and raised forward expectations, supporting a 7% gain since earnings and 22% rebound from its July 29 pre-earnings trough. Caterpillar's EPS was 22% above consensus excluding IEEPA refunds, with sales and margins ahead across segments and continued data-center demand extending power-and-energy visibility. For high-short-interest meme stocks, JPMorgan identifies the possibility of unexpected flows where strong retail buying coincides with hedge-fund shorting. The report explains that opposite retail and short positioning raises the risk of either a short squeeze or retail losses. BBAI had roughly 32% short interest, DFNS about 22%, and SES about 14%; these names had distinct recent retail-flow and corporate-event catalysts. Retail options activity was slightly below its highs, with the most traded options concentrated in Tesla, Micron, Nvidia, Amazon, Microsoft, SanDisk, Meta, AMD, Apple and Alphabet.

Analysis framework

JPMorgan combines weekly and intraday retail-flow measures with one-year percentile and z-score comparisons to identify unusual buying or selling. It separates ETF and single-stock activity, then attributes flows by sector, theme, earnings event and individual security. The report also overlays social-media interest and short-interest data to identify names where opposing retail and hedge-fund positioning could create unusual flow risk.

Methodology notes

• Event-Driven and Behavioral FinanceFund-Flow and Positioning Analysis

  Retail-flow, options-flow, social-interest and short-interest analysis

  The report uses net purchases, percentile ranks and z-scores to assess retail positioning around earnings and themes, and combines retail buying with short interest to flag potential squeeze dynamics.

• Event-Driven and Behavioral FinanceEvent-driven analysis

  Earnings-event flow analysis

  JPMorgan links post-earnings price moves, guidance and company results to subsequent retail buying or profit-taking in individual stocks.

Key data

• Total weekly retail flows$3.5BBelow the $6.8B 12-month weekly average.
• ETF versus single-stock flows+$5.0B ETFs; -$1.6B single stocksRetail investors favored ETFs over individual equities.
• Retail-flow percentile4.4th percentile versus one yearUp from the 0.8th percentile the prior week.
• Technology ETF flows+1.3zNormalized from -2.2z; SOXX, SMH and SOXS led inflows.
• Amazon AWS growth and backlog37% AWS growth; $496B backlogAWS growth was the fastest in 18 quarters and backlog increased nearly 2.5x year on year.
• Amazon 2026 capex outlook~$220BRaised on stronger AI-demand expectations.
• AMD retail flow+$326M, 2.6zSecond-largest weekly retail inflow; AMD was also the top-bought name on Wednesday at 3.0z.

Impact & implications

JPMorgan characterizes the week as an earnings-driven reopening of retail interest in the AI trade, expressed through semiconductor, memory and technology-ETF buying rather than broad purchases of post-earnings hyperscalers and software. The divergence indicates that retail investors were locking in gains in recent outperformers while selectively adding exposure to perceived AI beneficiaries and earnings-related dislocations.

Risks

• Stocks with heavy retail buying and high hedge-fund short interest may experience unexpected flows, including short squeezes or retail losses.
• SanDisk and Western Digital fell after market despite strong earnings because their guidance was softer than expected.
• AMD's next-quarter guidance was modestly below the buy-side bar, particularly on gross margin.
• Aptiv cut its second-half guidance despite solid results, and its shares fell 17%.

What to watch

• Whether retail inflows into memory, semiconductors and technology ETFs persist after the earnings-driven sentiment shift.
• Whether profit-taking in hyperscalers and software continues following sharp post-earnings share-price moves.
• Changes in retail buying, social-media attention and short interest among high-short-interest meme stocks.