Perhaps “buy low, sell high” has gone out of fashion as a formula for how to make money trading on the stock market.
Because the Schwab Trading Activity Index (STAX) is any indication, retail investors are going to continue pouring money into AI giant Nvidia (NVDA).
To be fair, Nvidia closed the trading week on Friday priced at $183.16, which is far below the $241.25 price for shares of WingStop (WING).
Putting that in perspective: Nvidia is arguably the most important name in artificial intelligence at the moment, while WingStop is a fast-food chain that makes chicken wings.
So it’s possible that investors really are in fact buying low on the chipmaker’s stock.
According to STAX, which tracks the behavior of Schwab’s self-directed clients, Nvidia was the top net-buy stock for September, followed by Oracle (ORCL) and Palantir (PLTR). This was Oracle’s first time in the top five, joining OpenDoor (OPEN) as new entries in that group.
Amazon (AMZN) rounded out the top five.
September was the fourth straight month that Schwab’s clients were net-buyers.
Retail investors got hungrier for risk
To be sure, STAX showed that investors were “selling into rallies and buying dips” during September, including with names like Apple (AAPL), Tesla (TSLA) and Micron (MU).
STAX rose to 46.12 in September, up 5.56% from 43.69 in August. It was the best mark since 48.36 in March.
It also outpaced the S&P 500 by a wide margin in September, gaining 5.56% versus 2.84% for the S&P. This was the second month in a row that STAX outgained the index.
Schwab noted that clients started putting money into “smaller names as interest in AI-related stocks beyond the Magnificent Seven continued to shape their trading.”
They also ventured into other sectors like consumer staples, materials and industrials.
“The reign of the Magnificent Seven may not be over, but in September we saw Schwab's retail clients branch out from those traditional names and into higher-volatility, AI adjacent stocks, some of which have made big moves recently," Joe Mazzola, head trading and derivatives strategist at Schwab, said in a statement.
Mazzola pointed to the fact that many new names entered the top 10 list, which suggested “clients are casting a wider net, seeking additional upside from a market trading at all-time highs."
Tesla and Apple topped the list of net-sells by clients, the second straight month the two companies have been some of the most heavily sold shares. They were joined by Alibaba (BABA), Micron, and Super Micro Computer (SMCI) in the top five.
Tech was the most net-sold sector for the month, just as it was in August. In fact, Schwab clients have been selling off tech stocks in high numbers since December.
Another noteworthy development is that Schwab’s retail investors appeared to shrug off the US government shutdown, as the gains for the last week of the STAX reporting period were the highest for the month.
"The last four or five shutdowns didn't have big effects on the market, so clients apparently see the news as no big deal," Mazzola said.
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