Individual investors took advantage of the slide in Nvidia and other technology plays on Monday, but institutions stayed away, according to JPMorgan. Data from Vanda Research shows retail investors snapped up a record amount of Nvidia shares on net on Monday, when the stock suffered its worst loss in nearly five years after the emergence of China’s DeepSeek AI platform catalyzed a global tech rout. Small traders also bought into the Invesco QQQ Trust (QQQ) and the GraniteShares 2x Long NVDA Daily ETF (NVDL) , JPMorgan said. On the other hand, hedge funds and other big investors likely helped amplify Monday’s correction by not buying the dip, according to Nikolaos Panigirtzoglou, a JPMorgan managing director. Some funds may have reversed their bets on “U.S. exceptionalism” and America’s lead in AI, sparked by the alternative presented by DeepSeek’s artificial intelligence model, he said. “While retail investors continue to buy the dip on Nvidia and [U.S.] tech stocks, institutional investors, including hedge funds have been becoming more cautious,” Panigirtzoglou wrote to clients. In fact, Panigirtzoglou said that institutional investors have more gradually lowered their wider exposure to stocks since last summer. As a result, it’s safe to assume they further cut back on Nvidia and other AI trades on Monday — driving down prices. He noted that there could be more volatile trading ahead as funds rebalance at the end of the month, which wraps up Friday. Still, it may not all be doom and gloom, thanks to Main Street. Panigirtzoglou said the year-to-date reversal in the “U.S. exceptionalism” trade has been “rather modest” so far in 2025. While institutional investors may be taking some profits on the investment theme, retail investors have provided a “backstop” for the U.S. equity market, he added.
