US retail investors are shifting capital from Magnificent 7 stocks to AI infrastructure companies including SK Hynix and Intel, according to fund flow tracker VandaTrack cited by the Wall Street Journal on May 19 (local time). During May 1-17, US retail investors net purchased $194 million in Intel stocks compared to $52 million in Microsoft stocks — a 3.7x difference — while also allocating $56 million to AI cloud company IREN. The investment rotation reflects declining confidence in M7 concentration as five of the seven stocks underperformed the S&P 500 index this year, with Microsoft falling 19% and only Apple gaining 23%. VandaTrack analysts noted retail investors are no longer buying M7 as a bundled group but instead selecting individual companies with stronger conviction. Despite the shift, M7 stocks still account for 36% of total S&P 500 market capitalization.
US Retail Investors Redirect $194 Million to Intel During May 1-17
VandaTrack data shows US retail investors net purchased $194 million in Intel stocks during May 1-17, compared to $52 million in Microsoft stocks during the same period. AI cloud company IREN received $56 million in net inflows. The Magnificent 7 group comprises Microsoft, Apple, Amazon, Meta, NVIDIA, Alphabet, and Tesla. VandaTrack analysts stated retail investors are no longer purchasing M7 as a single bundle but are selecting companies based on individual investment conviction. M7 stocks continue to represent 36% of total S&P 500 market capitalization.
Software Executive Alex Cardona Increases Holdings in Equinix and Marvell Technology
Alex Cardona, a 50-year-old software company executive, increased his investment allocation to data center operator Equinix and semiconductor company Marvell Technology. Cardona's portfolio maintains a small M7 weighting, while his Marvell holdings gained over 120% this year — his highest-performing position. Cardona stated his goal is to hold stocks of companies providing the infrastructure needed for AI operations. College student Davis Cantrell, 19, residing near Atlanta, reduced his Microsoft holdings and sold all NVIDIA stocks, reallocating capital to space and quantum computing stocks. Cantrell stated large-cap technology stocks remain viable investments but the period of significant gains has passed, and he is seeking growth stocks with higher upside potential despite greater risk.
Philadelphia Semiconductor Index Falls 1.6% Following China Moonshot AI Model Release
The Philadelphia Semiconductor Index declined 1.6% on May 17 following China-based Moonshot AI's release of its new AI model Kimi K3. The index fell over 20% from recent highs. Small and mid-cap semiconductor stocks, software stocks, and all M7 stocks declined simultaneously. Jonathan Kofsky, portfolio manager at Janus Henderson, stated the market wants more evidence that AI is driving revenue growth or productivity improvements, and maintaining current investment levels requires AI investment results to manifest across the broader economy. US retail investors continued purchasing M7 stocks during early 2025 when markets were shaken by China's DeepSeek shock and tariff uncertainty in the prior year, but recently expanded investment scope to semiconductor, cooling equipment, and power-related companies needed for AI infrastructure construction.
FAQ
Q: What stocks did US retail investors purchase during May 1-17 according to VandaTrack data?
A: US retail investors net purchased $194 million in Intel stocks, $52 million in Microsoft stocks, and $56 million in AI cloud company IREN stocks during May 1-17 according to VandaTrack data cited by the Wall Street Journal.
Q: How did Magnificent 7 stocks perform this year compared to the S&P 500 index?
A: Five of the seven Magnificent 7 stocks underperformed the S&P 500 index this year. Microsoft fell 19%, recording the weakest performance, while Apple gained 23%, recording the highest return among M7 stocks.
