Individual investors have become the engine behind this year’s tech rally, pouring billions into the sector while brushing off concerns about overvaluation and concentration.
According to Goldman Sachs data, retail traders are now scooping up as much as $3 billion in notional value of tech stocks every single day. Flows have more than tripled to a record high since February.
⚠️This is absolutely WILD:
undefined Global Markets Investor (@GlobalMktObserv) August 15, 2025
Retail investors are buying US technology stocks at the fastest pace on RECORD.
Mom-and-pop investors' flows into technology stocks have more than TRIPLED since February.
Retail is now averaging ~$3 billion notional to buy every day. pic.twitter.com/7uBKRR57k2
The surge isn’t entirely surprising. Investors Observer reports that much of 2025’s market rally has been powered by mom-and-pop investors using “buy-the-dip” and dollar-cost-averaging strategies.
Meanwhile, JPMorgan data shows retail buyers snapped up a net $270 billion worth of stocks in the first half of the year and are on pace to plow another $500 billion into equities before year’s end.
It’s not just individual stocks either. Retail flows into ETFs are now running at their fastest pace in more than a decade, according to Vanda Research vice president Marco Iachini.
The trend doesn’t look set to reverse anytime soon, with retail investors convinced the rally has room to run.
A recent Investopedia survey found 60% remain optimistic on markets, even as the S&P 500 and Nasdaq trade at record highs.
Tech valuations stretch higher
The euphoria comes just as warning signs about valuations are getting louder, especially in tech.
Nvidia (NVDA) alone now makes up a record 8.2% of the S&P 500. Meanwhile, just four companies — Nvidia, Microsoft (MSFT), Meta Platforms (META), and Broadcom (AVGO) — have driven 60% of the index’s gains this year, according to DataTrek Research.
On a price-to-sales basis, the S&P 500 Technology sector is more overvalued than at any time in history, even topping the dot-com peak of 2000.
⚠️ The history of financial markets has NEVER seen this before:
undefined Global Markets Investor (@GlobalMktObserv) August 13, 2025
The S&P 500 Technology Sector Price-to-Sales ratio hit 10x, the highest EVER.
Even at the 2000 Dot-Com Bubble peak, the ratio was ~7.8x.
By comparison, the median ex-tech P/S ratio is just 3x.
Holy cow. pic.twitter.com/JaHzCW9Pkz
DataTrek co-founders Nicholas Colas and Jessica Rabe told clients that without the hype around generative AI, the S&P 500 would likely be up just 3%–4% this year, rather than 10%.
That hype is fueled by staggering AI investment.
America’s tech giants are expected to spend $400 billion on AI infrastructure this year alone. As The Wall Street Journal pointed out, this figure is larger than the European Union’s total annual defense budget.
But until those investments start producing measurable returns, margins could take a hit.
D.A. Davidson analyst Gil Luria warned that the short-term effect of massive AI spending will be more about pressure on profitability than immediate payoff.
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