AI in action · Investor protection
Retail Sold Stocks in the AI Rout but Bought 3x ETFs
Retail investors sold a net $358 million of US single stocks by mid-afternoon on November 5, the most since March 2020, Vanda Research data showed.
Thursday, November 5, was the day the AI trade broke, with the Nasdaq down 5.5% and the Philadelphia semiconductor index down 12%. It was also the day individual investors stopped buying the dip. By 2:58 p.m. Eastern time, retail traders had sold a net $358 million of individual US stocks, according to Vanda Research data reported by Yahoo Finance, on track for their biggest net selling day since March 17, 2020, when they pulled $502 million at the height of the Covid crash.
Vanda strategist Viraj Patel called it "a total capitulation by retail investors" and said there were no signs of dip-buying in single stocks. He described it as part of a broader "buyers' strike" that included institutions, alongside forced selling by systematic and leveraged strategies. Reports of the final figure for the day vary, from about $257 million to $265 million, but every version puts it among the heaviest days of retail selling since 2020.
The selling did not extend to everything. Some investors kept buying leveraged funds, including the ProShares UltraPro QQQ, which aims to deliver three times the Nasdaq-100's daily move, and the Direxion Daily Semiconductor Bull 3X Shares. In other words, part of the retail crowd swapped individual AI names for a geared bet on a rebound in the whole group.
The pattern has been building all year. In July, Vanda data cited by Business Insider showed retail traders selling a net $243 million of single stocks in one day, the ninth day of net selling in 2026, after no such days at all in 2021, 2024 or 2025. Memory-chip stocks were among the most heavily sold then too, and Vanda warned that the shift away from single-name risk "could still leave popular momentum names vulnerable if earnings disappoint".
Retail flows matter for AI stocks because individuals have been among their steadiest buyers. If they stay on the sidelines, rebounds such as Friday's 1.1% gain in the Nasdaq depend more on institutions and short covering. The leveraged ETF buying cuts the other way: those funds reset daily, so a choppy week erodes their value even if chip stocks end where they started.
Sources: Yahoo Finance — Stock market today: Dow plunges 1,800 points, Nasdaq enters correction in AI trade meltdown (Nov 5, 2026); Business Insider via AOL — Retail investors are starting to get cold feet on the AI trade (Jul 30, 2026)