Retail Investors Are Buying AI Stocks, But Not the Ones They Used To

As artificial intelligence (AI) continues to reshape industries across the globe, a noticeable shift is emerging among retail investors. While giants like Nvidia (NVDA), Microsoft (MSFT), and Alphabet (GOOGL) once captured the lion’s share of AI-driven retail investment, newer players are starting to gain traction in 2025.

The Shift Away from “AI Blue Chips”

For much of 2023–2024, retail investors poured into megacap tech stocks that were heavily involved in AI development, particularly in generative AI, cloud infrastructure, and chip design. Nvidia’s meteoric rise and Microsoft’s OpenAI partnership made them popular portfolio staples.

However, as valuations of these stocks reached historic highs and investor sentiment matured, retail investors began to look beyond the obvious. Analysts note a cooling off in retail inflows to the biggest AI names, driven in part by:

• Valuation concerns

• Slower-than-expected monetization of AI features

• Market saturation in mega-cap tech holdings

Where the Retail Money Is Going Now

According to recent data from brokerage platforms and trading apps like Robinhood and eToro, retail capital is increasingly flowing into mid-cap and emerging AI-related companies, including:

• Palantir Technologies (PLTR): With a focus on government contracts and AI-based data analytics, Palantir has seen a sharp uptick in retail buying.

• C3.ai (AI): This enterprise AI software firm has regained attention thanks to renewed contract wins and product innovation.

• SoundHound AI (SOUN): A niche player in voice AI technology, SoundHound is gaining traction with investors seeking high-risk/high-reward bets.

• Symbotic (SYM): This robotics-driven warehouse automation firm has become a retail favorite due to its strong AI foundation and real-world applications.

Social Media and AI Investing Trends

AI investing is also being influenced by online communities. Reddit threads, TikTok investing influencers, and Twitter/X accounts have all amplified interest in lesser-known AI stocks. “Retail is moving from hype to utility,” said one market strategist, “and looking for the next Nvidia before it’s priced like Nvidia.”

This trend reflects a broader maturing of retail investor behavior. Instead of chasing headlines, many are now looking deeper into business models, partnerships, and real-world AI deployment in healthcare, logistics, cybersecurity, and more.

Caution Still Warranted

Despite growing enthusiasm, experts warn that many of the new AI favorites are highly volatile and speculative. Some have yet to turn a profit or demonstrate long-term scalability. Retail investors are advised to:

• Diversify their AI exposure

• Balance growth stocks with fundamentals

• Avoid emotional trading driven by social media hype

Conclusion: A New Chapter in AI Investing

Retail investors are not leaving the AI boom behind—they’re simply evolving. While the mega-caps still anchor many portfolios, the spotlight is gradually shifting to smaller, potentially more agile players. For investors looking to stay ahead of the curve, the real opportunity may now lie in uncovering the AI companies with unique solutions and long-term scalability.