Exclusive moomoo data unveils how retail investors rode the 2023 tech wave
An In-depth Look at Magnificent 7 Stocks including Tesla, Nvidia And More
In the Goldman Sachs report, "2024 US Equity Outlook All You Had To Do Was Stay," it disclosed that the massive outperformances of the “Magnificent 7” ("M7") mega-cap tech stocks had been a defining feature of the 2023 equity market. In 2023, the M7 stocks logged an impressive average return of 111%, compared to a 24% return for the broader $S&P 500 Index(.SPX.US$ [1]. By the end of 2023, all seven stocks beat the S&P 500 by a wide margin and dominated the market amid the bullness sentiment throughout the whole year. Many institutions estimated that by removing the influence of M7 from S&P 500, the index would possibly finish the year with a single-digital return [2].
Figure 1 - The annual return of the Magnificent 7 stocks (2020-2023)
Retail investors followed M7 closely in 2023, especially Tesla and Nvidia
Moomoo, the intuitive investment and trading platform, dug deeper into these numbers and found that retail investors on the moomoo app actively engaged in this huge market trend, as some M7 stocks ranked in the top for monthly popularity and buying volume. This information was based on data generated from Moomoo US accounts' trading activities in 2023. In studying this data, moomoo ranked all stocks tradable on its platform month by month with two criteria: the number of active US accounts buying the M7 stocks and the volume of funds buying them. We then focused on the top ten stocks of these two rankings and saw the frequent presence of $Tesla(TSLA.US$, $NVIDIA(NVDA.US$ and more M7 stocks.
The below two images are M7 stocks’ rankings (y-axis) on the top ten stock lists for the 12 months in 2023 (x-axis).
Note: If some of the M7 stocks do not appear in the chart for one of the months, it means other stocks outside of the M7 were in the top 10 most traded or by volume of funds for that month.
Figure 2 – 2023 M7 Rankings
Moomoo found that in general, traders on its platform were extremely keen on Tesla and Nvidia in 2023, trading from $100 to $300 per share and from $100 to $600 per share last year, respectively.
In 2023, Tesla ranked first among the top 10 stocks every month in terms of its monthly buying volume. By the number of accounts buying the stock, or popularity, Tesla ranked either first or second in 2023. During this time, Tesla was one of the top stocks available on moomoo, with the highest volume of funds buying the stock and largest by the number of accounts buying the stock.
Nvidia ranked high as well, finishing second in nine months during 2023 in terms of volume of buying funds. During the second half of 2023, its monthly rankings by the number of accounts buying the stock jumped as high as fifth place.
Tesla and Nvidia among the top spots, data from moomoo community shows
moomoo then calculated the total counts of likes, comments, sharings, savings and posts for a certain stock to measure its engagement level in moomoo's interactive online investing community. According to statistics based on over 20 million global users in moomoo community, Tesla and Nvidia were in the spotlight in 2023, with 12.8% and 27.5% annual engagement growth, against the level recorded in 2022 (Figure 3).
Figure 3 - 2022/2023 M7 Engagement Change
We ranked all moomoo community posts with labels of Tesla and/or Nvidia that were produced in 2023 according to their engagement level from the highest to the lowest. Taking an in-depth look into the top 50 posts and filtering those irrelevant to the two stocks out, we found moomoo users were generally interested in learning more about:
Technical analysis of Nvidia and Tesla, especially when the stocks demonstrate a strong uptrend and some technical signals emerge.
Earnings results of both companies, especially on AI chip demand for Nvidia and EV sales for Tesla.
New product launches, such as Tesla's Dojo, as well as Wall Street's outlook for both stocks.
Retail investors at moomoo believe that comparing with other competitors in the EV industry, Tesla appeared to be more favorable to them. Although the industry is very competitive, they still held a high expectation for Tesla due to the ecosystem it had built, which is believed to potentially generate income in the future.
Figure 4 - M7 Stocks Engagement Distribution Charts
Looking at the engagement distribution of each M7 stock, Tesla and Nvidia took 53.0% and 10.8% of the total engagement of M7, versus 46.0% and 8.3% seen in 2022.
Wall Street's Outlook for 2024 US Equities and M7
Looking ahead, Wall Street's opinions about the 2024 trajectory of the US equity market are highly divided. JP Morgan Chase held a relatively cautious outlook, reckoning a year-end target of 4,200 points for the S&P500 index for 2024, while Bank of America, Deutsche Bank, Goldman Sachs, and Citigroup are comparatively optimistic, expecting that the S&P 500 will jump to above 5000 in 2024 [3]. On February 5th, the S&P 500 index closed the day at around 4940.
Meanwhile, many investors are seeing a sector rotation period in 2024 [4]. Besides the M7, they are expecting an upward momentum for more companies, especially those with stable revenues and growth potentials. This is under the assumption that economic growth will accelerate and that the global economy will approach a soft landing in the end. Investors might shift their interest to relatively undervalued cyclical stocks, marking a more cautious and comprehensive value comparison investment strategy.
By the end of February 5th, the 2024 year-to-date return for $NVIDIA(NVDA.US$had achieved a remarkable 40% year-to-date return, followed by $Meta Platforms(META.US$ 30%, $Amazon(AMZN.US$12%, $Microsoft(MSFT.US$ 8%, and $Alphabet-C(GOOG.US$ $Alphabet-A(GOOGL.US$ 3%. However, $Tesla(TSLA.US$'s 2024 YTD return has slumped, down 27%, with $Apple(AAPL.US$shares also down 3%.
However, opinions that tech behemoths could continue to lead the market gains in 2024 are widely believed, as AI continues to reshape industries and bring more possibilities to the world. Brokerage firm Wedbush forecasted a 25% increase in tech stocks in 2024, driven by solid enterprise spending and AI catalysts; and a 30% surge in the Magnificent 7 stocks, leading tech growth in 2024, with AI at the forefront [5].
Reference
*Disclaimer
All company analysis information is provided by third parties and not by Moomoo Financial Inc. The content is for informational purposes only and is not a recommendation of any specific securities, trading or investment strategy. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal.
This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
The S&P 500 is a market-capitalization-weighted stock market index that tracks the stock performance of about 500 of some of the largest U.S. public companies. Individuals cannot invest directly in any index.
This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
The S&P 500 is a market-capitalization-weighted stock market index that tracks the stock performance of about 500 of some of the largest U.S. public companies. Individuals cannot invest directly in any index.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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