Retail investors enjoyed another banner year by sticking with tried-and-true large-cap tech names that raked in big profits and promised advances in artificial intelligence.
Vanda Research estimated the year will end with about $265 billion in net new inflows into US markets by self-directed retail investors. While that is $25 billion less than the previous three years’ average, based on Vanda Research’s data, it’s still within the post-COVID-19 range — indicating a healthy appetite for the average investor to be engaged with markets.
The six corporate tickers with the most retail investor inflows were a who’s who of tech momentum trades: AMD (AMD), Nvidia (NVDA), Apple (AAPL), Palantir (PLTR), Tesla (TSLA), and Amazon (AMZN). These five names pulled in $67.7 billion in total retail inflows this year. Nvidia overtook Tesla as the most popular stock among retail investors, at least judging by inflows.
Nvidia has pulled in $29.8 billion in retail net inflows this year, per Vanda Research’s findings, up from $11.4 billion last year. Tesla’s retail inflows dropped to $14.7 billion from $48 billion in 2023.
Tesla still edged out Nvidia as the top holding in retail investor portfolios, however — representing a 10.58% average portfolio weighting compared to 10.33% for Nvidia.
The other four top tickers were more index-based trades levered to popular themes such as AI: Direxion Daily Semiconductor Bull 3X Shares (SOXL), Invesco QQQ Trust (QQQ), ProShares UltraPro QQQ (TQQQ), and SPDR S&P 500 (SPY).
“2024 was an eventful year for markets,” Vanda Research senior vice president Marco Iachini said. “For the average retail investor, it was another great year of portfolio performance. Loyalty to tech names paid off.”
Indeed that tech loyalty did pay off.
Vanda Research estimates that the average retail portfolio is up 40.74% this year, the second-highest performance since 2014. Only 2023’s 41.94% performance was better over this 10-year time span.
On a flow-adjusted basis, Vanda Research noted that this would mark the second time retail investors have beaten the S&P 500 (^GSPC) in back-to-back calendar years and the first time since 2014 that the non-institutional crowd beat the Nasdaq Composite (^IXIC).
US President-elect Donald Trump and Elon Musk watch the launch of the sixth test flight of the SpaceX Starship rocket in Brownsville, Texas, on Nov. 19, 2024. Brandon Bell/Pool via REUTERS/File Photo ·Reuters / Reuters
Whether the feel-good times for retail investors will continue in 2025 is anyone’s guess.
“I’m not saying it’s going to be perfect, but I’m saying the possibilities of us doing very well over the span of the next few years is significant,” Joe Moglia, former CEO of TD Ameritrade, said on Yahoo Finance’s Opening Bid podcast (listen below).
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But the markets are poised to enter January on a whimper despite potential pro-growth Trump policies as the outlook for Fed policy has become increasingly uncertain.
The consensus among Fed officials is now for two rate cuts next year after its December meeting, down from four previously forecast in September, as the monetary policy body remains concerned about the inflationary outlook. The outlook for inflation is further clouded by potential moves by the incoming Trump administration, such as possibly inflationary tariffs on China.
The S&P 500 and Dow Jones Industrial Average are down 2% and 5%, respectively, in December. The Nasdaq Composite is up 1.4%.
Market leader Nvidia is down 1% in December.
“The stock market in 2025 will likely experience fluctuations, but significant opportunities are seen in individual stock picks, especially in sectors like EVs, AI, healthcare, and quantum computing,” MarketGauge chief strategist Michele Schneider told Yahoo Finance. “Tax cuts and deregulation could spur growth, although tariffs and inflation remain risks. The year may start under pressure but rally towards the middle to end of the year posting modest gains, with a potential stagflation environment prevailing until mid-2026.”
None of Schneider’s top stock picks for 2025 would qualify as typical retail investor favorites: AbbVie (ABBV), Kratos (KTOS), International Business Machines (IBM), Salesforce (CRM), Coinbase (COIN), Chewy (CHWY), Ulta Beauty (ULTA), Alibaba (BABA), and Rivian (RIVN).
But hey, maybe they will garner some retail investor attention.
StockStory aims to help individual investors beat the market.
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
