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RETAIL CHASING ALTERNATIVE AI PLAYS, CUTTING NVIDIA - VANDA

Retail traders timed the market well by buying the liberation-day selloff, so their current actions amid jitters from Middle East tensions could offer some valuable insights.

Data from Vanda Research shows that retail is increasingly moving funds into "second-order" artificial intelligence $(AI)$ beneficiaries, diversifying beyond Nvidia NVDA.O and other dominant tech plays.

This emerging trend involves buying smaller-cap stocks and themes directly benefiting from AI, such as data centre energy infrastructure and quantum computing, according to Marco Iachini at the U.S.-based research firm.

Meanwhile, they are trimming Nvidia exposure, which is close to all-time highs. This approach stems from concerns over U.S. chip tariffs and ongoing U.S.-China trade uncertainties, making a pivot to alternative AI a "rational" move.

That being said, Iachini wouldn't be surprised to see strong buy-the-dip flows emerging should a tariff announcement spark a sell-off in Nvidia stock.

(Danilo Masoni)

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EARLIER LIVE MARKETS POSTS:

STOXX AT SIX-WEEK LOW CLICK HERE

EUROPE BEFORE THE BELL: NERVES ARE BUILDING CLICK HERE

MORNING BID EUROPE: GEOPOLITICS, RATE DECISIONS KEEP MARKETS CAUTIOUS CLICK HERE