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Retail Investors Buy Dip After Software Stock Slump
13 Feb
Summary
- Retail investors bought the dip following a software sector plunge.
- ETFs, not single stocks, drove retail flows post-selloff.
- Retail preferred media and semiconductors over software since 2026.
Retail investors actively purchased stocks and ETFs following a substantial software sector sell-off, according to JPMorgan's analysis. This buying trend, termed 'buying the dip,' occurred in the week of February 6-11, 2026, contrasting with a year-to-date low in retail buying activity on February 5.
JPMorgan's strategists noted that retail flows surged above daily averages during this period, with a notable preference for Exchange Traded Funds over individual stocks. This behavior deviates from their broader trend since the start of 2026, where retail traders have favored buying media and semiconductor stocks while selling software.
The analysis also highlighted specific stock movements. Retail traders bought Amazon and Alphabet shares after earnings but largely avoided Meta stock's gains. Additionally, JPMorgan flagged certain social media-popular stocks exhibiting high retail buying alongside significant hedge fund shorting, suggesting potential for unexpected market shifts. Stocks like Hims and Hers and Strategy showed this imbalance in the past week.
