Private investors in the U.S. have cooled on bigtech - WSJ

Retail investors in the U.S. have shifted their focus from an unqualified bet on the stocks of the "Magnificent Seven" tech giants to a more diversified approach after April's surge, found out The Wall Street Journal. They are finding alternatives: investing in international markets, small companies, utilities and consumer staples - in more stable or undervalued assets. But investors are in no hurry to completely exit large technology companies, especially those related to artificial intelligence.

In recent weeks, retail investors have cut back on buying shares of the "Magnificent Seven" - Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla - and other tech giants. The share of such purchases in total market inflows has fallen, from 41% at the start of market turbulence in April to about 23% by mid-June, wrote the WSJ, citing data from Vanda Research. According to Morningstar Direct, technology ETFs have raised $7.1 billion since the start of 2025. By comparison, investors have invested about $25 billion in funds focused on stocks of undervalued companies, and nearly $70 billion in international funds, notes the publication.

- During market turbulence in April, 60-year-old entrepreneur Patricia Andrews of California invested tens of thousands of dollars in two funds focused on the technology sector. Now that those securities have recovered, she's selling the bulk of them. "They seem to have run out of steam," told Andrews to the WSJ. She plans to put the profits into funds that invest in international companies.

- Tom Griffin, a 42-year-old rancher in Texas, bought shares of Tesla and Nvidia during the spring sale. Now he's switched to more stable ideas - UnitedHealth and Wells Fargo securities. Гриффин говорит, что он не столько уходит от инвестиций в технологии, сколько ищет акции надежных компаний по разумной цене. He says tech giant stocks looked much more attractive a couple months ago than they do now.

- Paul Taylor, 70, of Buffalo, on the Canadian border, back in the spring began reducing the Magnificent Seven's share of the portfolio, where it used to take up nearly half. Instead, he bought securities from Berkshire Hathaway, Walmart and, for the first time ever, a gold ETF. The investor added that he doesn't intend to get rid of the shares of  "The Magnificent Seven" completely:  "I just don't think they justify the price they're being asked for right now."

No one is in a hurry to completely abandon the tech sector: Microsoft shares recently hit new highs, while Tesla, Nvidia and Apple remain among the most traded on the Interactive Brokers platform. Meanwhile, new popular investment ideas are also related to AI: private investors are showing interest in companies such as software developer Palantir and nuclear energy startup Oklo, the WSJ reports.

For those looking to buy one of the "Magnificent Seven" stocks to bet on AI growth, the best choice is Alphabet, advised investment-rating agency Morningstar last week. According to Morningstar, Google's parent company has a strong position in the field and its stock is undervalued.

This article was AI-translated and verified by a human editor