Last year, retail investors outperformed professionals, by wading into the market when the pros were scarred by tariff worries.
Is Main Street about to beat Wall Street once again?
A JPMorgan team led by head of U.S. equity quant strategy, Arun Jain, finds that the bulk of investor purchases made by retail investors this year has been in AI stocks, semiconductors and Magnificent Seven companies.
JPMorgan finds that retail investors are actually pretty good at picking particular software and AI stocks. They compared their purchases versus a dollar-cost averaging strategy, in which investors would invest the same amount at regular intervals.
J.P. Morgan Equity Strategy & Quantitative Research
While February has seen a brutal Wall Street rotation away from tech, retail investors resumed selling the 470 other S&P 500 stocks to keep buying the dip in Magnificent 7 and AI players, said the strategists.
More evidence of such fearless buying comes from Citadel Securities’ Scott Rubner, who labeled retail participation as “unprecedented” to start the year.
“The magnitude, persistence, and breadth of buying activity have materially exceeded prior peaks, underscoring retail’s role as a primary source of incremental demand in early 2026,” he told clients on Wednesday.
February also isn’t showing any signs of a seasonal slump that tends to happen after big buying in January, Rubner said.
“Software is the clearest example — as the group has come under pressure, retail investors have leaned aggressively into the weakness, driving flows decisively into single-stock software names,” Rubner wrote.
The magnitude of those inflows is now at historical extremes, roughly two-thirds of the total net flow seen across all sectors in 2025.
Rubner commented that the sheer amount of money investors have been throwing at markets this year is more than they’ve ever seen before, and not down to a few wild days, but “persistent” activity:
Average daily options volume for the retail cohort is more than 15% higher, year-to-date, above last year’s pace, adds Rubner.
He said he’s watching for any signs of retail investors reducing the intensity of their buying.