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After rushing into tech stocks during April’s market selloff, many individual investors are now trimming their exposure to the sector, particularly the so-called “Magnificent Seven” companies: Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA).
According to report on Sunday by The Wall Street Journal, some investors are locking in gains from the recent rebound and shifting their money into international funds, value stocks or more defensive sectors like utilities and consumer staples. The pullback comes amid concerns that valuations have become stretched and market volatility remains high.
Retail appetite for the tech giants has noticeably cooled. Data from Vanda Research show that retail investor purchases of the Magnificent Seven have declined, with tech’s share of total inflows falling from 41% in early April to 23% by mid-June. Meanwhile, Morningstar reports that international ETFs attracted nearly $70 billion in net inflows this year—ten times more than tech-focused ETFs, according to the Journal.
While major tech names remain among the most-traded stocks, individual investors are increasingly diversifying. Some are favoring companies tied to artificial intelligence, like Palantir (NASDAQ:PLTR) or nuclear energy firm Oklo (NYSE:OKLO), while others are shifting toward large-cap financials, healthcare firms or even gold ETFs.
Though few are abandoning big tech altogether, many are growing more selective, less inclined to chase momentum and more focused on balancing risk in a still-uncertain market, the Journal reported.