A chart of net purchases of tech stocks.
Vanda research
Apple's stock has "defied all laws of gravity" this month, remaining on its path toward a $3 trillion market valuation thanks to its power base of retail investors.
The firm said in a note Wednesday that one-third of all retail money put into the popular QQQ Trust is directed to Apple.
Vanda said that the other FAMG stocks had only received a small amount. Tech giants like Facebook and Amazon are referred to as FAMG.
FAAMG is no longer a thing from a retail perspective. The group received large flows at the start of the epidemic, but there has been a changing of guards since then, wrote Vanda analyst Giacomo Pierantoni and senior strategist Ben Onatibia.
The price of Apple's stock has risen by more than 5% in December, thanks to the company's $90 billion stock buy back program and Apple's "cult following" by retail buyers. The stock has gained more than the S&P 500 this year.
Since the end of last month, retail buyers have directed about one-third of their money into those stocks, which includes both the companies and the stock market. Vanda said that the stocks have only received a small amount. Tech giants like Facebook and Amazon are referred to as FAMG.
The VandaTrack tool is used to monitor retail investment activity in the US.
The rest of the group has been no match for the appeal of the three companies. They said that the FAAMG is dead.
Vanda said that this has important implications for investors.
During risk-on rallies, retail demand for TAAN stocks makes them a much higher risk play. Unless your treasury desk has $90 billion to spare, stocks with high retail participation will usually decline.
Vanda said that examples of that dynamic are SPACs and meme stocks. Over time, interest in AMC and GME waned and large sell-offs don't find that many enthusiastic buyers. The large inflows that went into EV stocks like Lucid during the Q4 rally were a vulnerable space.
Business Insider has an original article.
