U.S. retail funds are flowing back into tech stocks. JP Morgan: NVIDIA Corporation (NVDA.US) attracted $834 million last week, memory chip stocks are in favor.

JPMorgan's latest research report shows that as U.S. stocks entered October, retail investor trading sentiment began to improve, with funds flowing back into the technology sector, especially artificial intelligence (AI), semiconductors, and memory chip-related stocks. Although rising U.S. Treasury yields, GEO Group Inc political risk, and oil price volatility continued to keep the market cautious, retail fund flows have shown signs of recovery. NVIDIA Corporation (NVDA.US) became the most favored individual stock among retail investors last week, with net buying reaching $834 million, while SanDisk (SNDK.US) and Micron Technology, Inc. (MU.US) also ranked among the top buys. JPMorgan noted that historically, retail investor trading activity is usually most active in the first quarter of each year, while the third quarter is relatively sluggish. As September ended, seasonal outflow pressure appears to be fading. Recent retail inflows have rebounded from September lows, and trading activity has gradually recovered to near the average level of the past 12 months. However, overall inflows remain slightly below the historical average. The report showed that during the week of October 1 to 7, U.S. retail investors net bought a total of $5.7 billion in stocks and ETFs, below the average of $6.7 billion per week over the past 12 months. Among this, ETFs saw net inflows of $4.7 billion, while individual stocks saw net inflows of $1 billion, indicating that retail investors still prefer to participate in the market through ETFs. Technology stocks have once again become the focus of retail fund chasing. JPMorgan data showed that the activity of inflows into technology sector ETFs has risen to the 73rd percentile of the historical distribution, compared with only the 4th percentile four weeks ago, reflecting a clear recovery in retail investors' interest in the technology sector. This round of capital return is not only concentrated in the U.S. "Magnificent Seven," but has also spread to other technology companies. The semiconductor and hardware sectors continued to attract funds, and software stocks also saw net buying again, indicating that retail optimism toward the technology industry is broadening. Specifically, NVIDIA Corporation received about $834 million in retail net buying last week, ranking first among all individual stocks. Alphabet Inc. Class C parent Alphabet (GOOGL.US) ranked second with $265 million, SanDisk ranked third with $150 million, Micron Technology, Inc. ranked fourth with $135 million, and Seagate Technology Holdings PLC (STX.US) ranked fifth with $129 million. Other large technology stocks also received inflows. Tesla, Inc. (TSLA.US) received about $122 million in net buying last week, Amazon.com, Inc. (AMZN.US) received $81 million, and Microsoft Corporation (MSFT.US) received $34 million. In contrast, Apple Inc. (AAPL.US) saw about $15 million in net selling. It is worth noting that although SpaceX (SPCX.US) shares rose about 15% last week, retail investors continued to reduce their holdings, with net selling reaching $177 million, making it the most sold stock of the week. JPMorgan pointed out that after SpaceX's listing, it had attracted retail investors to build large positions, and the recent stock price rise prompted some investors to take profits, although the pace of reduction has slowed somewhat since entering October. SpaceX's recent market attention has continued to rise. In addition to progress in Starship test flights and Starlink satellite deployment, market reports also said the company is seeking to raise about $40 billion to purchase NVIDIA Corporation chips to expand its AI systems. Musk previously said that the number of NVIDIA Corporation chips used in Colossus 2 could double by the end of the year. In addition to SpaceX, Intel Corporation (INTC.US) saw about $148 million in retail net selling last week, while Marvell Technology, Inc. (MRVL.US), Super Micro Computer, Inc. (SMCI.US), and Moderna (MRNA.US) were also among the five stocks with the largest net selling. From a sector-wide perspective, retail preference for technology stocks stands in sharp contrast to other sectors. Apart from the technology sector receiving about $602 million in net inflows and the industrial sector receiving about $143 million in net inflows, other major sectors generally saw net selling. Among them, the communication services sector saw about $231 million in net outflows, the financial sector saw $184 million in net outflows, and the healthcare sector saw $153 million in net outflows. At the same time, retail interest in financial stocks remains limited. JPMorgan noted that although large banks have recently underperformed, and as the market raises expectations for Federal Reserve rate hikes, the outlook for banks' net interest income has improved, and trading business revenue may also remain strong, retail investors have not yet clearly bought financial stocks on the dip. As the third-quarter earnings season is about to begin, corporate earnings performance may become the next key factor affecting retail fund flows. Market consensus cited in the JPMorgan report shows that third-quarter corporate earnings are expected to grow 31% year over year, or 27% excluding the energy sector; revenue is expected to grow 12% year over year, or 11% excluding the energy sector. The report pointed out that earnings growth across industries is expected to improve compared with the same period last year, with the energy and technology sectors expected to lead, while the consumer staples sector is expected to lag relatively. However, full-year 2026 earnings expectations have been continuously revised down since early September, meaning the market still needs to watch whether corporate performance can deliver on relatively high growth expectations. JPMorgan believes that as the third-quarter earnings season approaches, retail funds returning to technology stocks, the recovery in ETF trading activity, and strong U.S. economic growth momentum all provide some support for market sentiment. However, U.S. Treasury yields, oil prices, and the GEO Group Inc political situation may still affect investors' risk appetite, and whether the technology sector can sustain its inflow trend will depend on upcoming corporate earnings and changes in the macroeconomic environment.