Retail investors storm back into AI! Citadel Securities: Net buying of US stocks reached $9.1 billion last week, chip stock buying hit third-highest level in a year.

Retail investors who had once retreated are piling back into their favorite bet: artificial intelligence (AI). According to Scott Rubner of Citadel Securities, retail traders net bought $9.1 billion of US stocks on the firm's platform last week, concentrated in AI-related shares and exchange-traded funds, even as overall trading activity remained below average. The head of equity and derivatives strategy wrote in a report that this was the largest week of net buying in the past 15 weeks. Rubner said that despite doubts about the durability of the AI boom weighing on chip stocks, retail investors still net bought $2.6 billion of semiconductor shares last week, the third-highest weekly buying level in the past year. That puts October on track to be the biggest month for net purchases of chipmakers on the firm's platform. Individual traders also bought about $2.4 billion of AI infrastructure stocks over the same period. Even as warnings about an AI bubble persist, money continues to pour into the AI trade, driving major indexes higher. The tech-heavy Nasdaq 100 and the S&P 500 both hit record highs last week. In early October, Rubner accurately predicted that retail investors would return to US stocks this month after a sharp cooling in September. He noted at the time that with earnings season and corporate buybacks set to return, October offered investors a better entry point to "re-load." Rubner wrote that the increase in retail buying was broadly driven by "stronger one-sided bullish conviction, rather than a broadening in volumes." Last week, retail buying exceeded selling by 2.7%, with the weekly long-short skew in the 90th percentile, while overall trading activity remained in the 42nd percentile of the past year.