After the Nasdaq index plummeted, the “retail army” bottomed out! Nvidia (NVDA.US) is a popular target, but net buying power is relatively moderate

The Zhitong Finance App learned that after US stocks experienced the worst single-day sell-off since 2025 on Thursday, US retail investors who have long been keen to buy on dips re-entered the market again on Friday in an attempt to seize the rebound opportunity after the collapse in technology stocks. However, unlike the market adjustments of the past few years, the enthusiasm of retail investors is clearly cooling down this time. Despite serious setbacks in technology stocks such as Nvidia (NVDA.US) and Intel (INTC.US), which have attracted some purchases, geopolitical risks and concerns related to artificial intelligence (AI) continued to ferment, causing investors to remain cautious as the market rebounds.

According to data from Vanda Research, retail investors did start buying some of the stocks that had been sold off after the opening of the market on Friday, but net buying power for the NASDAQ 100 index constituents was relatively moderate and weakened further thereafter.

Viraj Patel, the company's global macro strategist, said that Nvidia was the most purchased stock by retail investors during Friday's opening. Previously, Nvidia's stock price plummeted 9.3% on Thursday, erasing all gains since this year.

Patel pointed out that retail trading on Friday showed mixed feelings. “There have been some mild net purchases, but far from crazy.” He said, “However, this is clearly different from the situation where individual stocks were generally sold on a large scale in early trading yesterday.”

In fact, even during the sharp fall in US stocks on Thursday, some retail investors chose to buck the trend and increase their positions. Invesco QQQ Trust (QQQ.US), which tracks the NASDAQ 100 index, plummeted 6.5% on Thursday, the biggest one-day decline since the COVID-19 pandemic triggered market panic in March 2020. However, investors still invested 2.8 billion US dollars in the fund on the same day, making it the largest single-day capital inflow since October 30.

This shows that despite a sharp sell-off in technology stocks, some investors still believe that market adjustments will provide long-term buying opportunities.

Meanwhile, highly leveraged trading products continue to be favored by active retail investors. Patel said that on Friday morning, Direxion tripled the daily semiconductor ETF (SOXL.US) and the ProShares triple long NASDAQ 100 ETF (TQQQ.US) ranked at the top of the retail buying list. These two funds are also the main products that retail investors have continued to actively buy in recent weeks.

Leveraged ETFs can amplify investors' daily income exposure to relevant indices or assets, so they are popular with short-term traders. However, such products also simultaneously amplify the risk of loss, especially when the market fluctuates sharply.

According to user transaction data from Fidelity Investments' brokerage platform, retail investors also concentrated on buying popular investment targets such as Nvidia, Pioneer ETF (VOO.US) that tracks the S&P 500 index (VOO.US), SOXL, and QQQ on Thursday. In addition, companies such as SpaceX, Micron (MU.US), Chaowei Semiconductor (AMD.US), and SanDK.US (SNDK.US) are also among the most actively traded individual stocks by Fidelity users. The number of buy orders for some of these stocks is at least double that of sell orders.

Since the COVID-19 pandemic, “buying on dips” has become one of the most representative trading strategies for retail investors in the US. When US stocks plummeted at the beginning of the pandemic in 2020, retail investors were one of the few groups of investors that bucked the trend. As the market then rebounded strongly, many investors who insisted on bottoming out received impressive returns, further strengthening the investment concept that long-term rise and fall in the market is a buying opportunity.

However, as leveraged products became more popular, some market participants began to worry, and investors may have underestimated the risk of a continued decline.

Steve Sosnick, chief strategist at Yingtou Securities, said, “The idea of buying on dips is deeply rooted in the mentality of active investors. Since many people used to profit from rising markets by leveraging long products, they are still sticking to these tools.”

However, he warned, “I'm worried that we now have a generation of investors who will instead rush into the building when the fire alarm sounds.” This metaphor reflects the concerns of market participants about retail risk awareness: in the past, tried and tested bottom-cutting strategies may not work every time the market falls.

Despite the rebound in US stocks on Friday, some experienced traders are still unwilling to drastically increase their risk exposure. Sinisa Sorgic, who has 20 years of trading experience and works for the self-operated trading company Bright Trading, said that he is careful to buy some chip stocks that have been severely slashed, but is worried that the market may sell off again early next week, so he is unwilling to fully invest.

Sorgic shorted TSM.US (TSM.US) on Thursday, but as the company's US stock rebounded 7.8% on Friday, his short trade suffered losses. “This is a dangerous time. I'm very nervous and I want to sleep well at night.” Sorgic said. He added: “Yesterday was just a bloodbath. Now that the market is volatile, it's not time to go all out.”

Overall, retail investors still showed a tendency to buy on dips after the current round of sharp declines in US stocks, but compared with the positive attitude during the past market adjustment period, this time they are clearly more cautious.

It is particularly noteworthy that some retail investors are still concentrating on buying highly leveraged technology ETFs, which shows that investors are concerned about market fluctuations but have not completely abandoned high-risk trading strategies.

As geopolitical uncertainty and concerns about the future of the AI industry continue to influence market sentiment, whether retail investors can once again reap rewards by buying on dips will still depend on the subsequent trend of US stocks. Meanwhile, Friday's relatively moderate buying also showed that even the strongest bottom-breaking force in the past is now beginning to re-evaluate market risk.