After the Nasdaq plunge, the "army of retail investors" entered to buy the dip! NVIDIA (NVDA.US) is a popular target, but net buying strength remains relatively moderate.

According to Zhitong Finance APP, after US stocks experienced the worst single-day sell-off since 2025 on Thursday, long-enthusiastic US retail investors who usually buy the dip entered the market again on Friday, seeking to seize the rebound opportunity following the tech stock plunge. However, unlike market corrections in past years, retail investors' enthusiasm for bottom-fishing has notably cooled this time. Although heavily hit technology stocks like Nvidia (NVDA.US) and Intel (INTC.US) attracted some buying, ongoing geopolitical risks and concerns related to artificial intelligence (AI) continued to ferment, making investors remain cautious amid the market rebound.

According to data from Vanda Research, after the opening on Friday, retail investors did start to buy some of the stocks that had been sold off, but the net buying strength of Nasdaq 100 index components was relatively moderate and weakened further afterwards.

Viraj Patel, the firm's global macro strategist, said that Nvidia was the most heavily bought stock by retail investors at the opening on Friday. Previously, Nvidia shares plunged 9.3% on Thursday, wiping out all the gains since the beginning of the year.

Patel pointed out that retail trading on Friday was a mixed picture. “There was some modest net buying, but far from being frenzied,” he said. “However, this is clearly different from the situation where there were massive net sell-offs of individual stocks across the board in the early session yesterday.”

In fact, even during Thursday’s US stock market collapse, some retail investors still chose to increase their positions against the trend. The Invesco QQQ Trust Fund (QQQ.US), which tracks the Nasdaq 100 index, plunged 6.5% on Thursday—the largest single-day drop since the market panic caused by the COVID-19 pandemic in March 2020. Despite this, investors still poured $2.8 billion into the fund that day, marking the largest single-day inflow since October 30.

This shows that even though tech stocks faced a heavy sell-off, some investors still believe that market corrections present long-term buying opportunities.

Meanwhile, highly leveraged trading products continue to be favored by active retail traders. Patel said that on Friday morning, Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL.US) and ProShares UltraPro QQQ (TQQQ.US) ranked among the top in retail buying. These two funds have also been the main products actively bought by retail investors in recent weeks.

Leveraged ETFs can amplify investors’ daily returns exposure to relevant indices or assets, making them popular among short-term traders. However, these products also magnify loss risks, especially during periods of violent market volatility.

According to user trading data from Fidelity Investments’ brokerage platform, on Thursday, retail investors also concentrated their purchases on Nvidia, Vanguard S&P 500 ETF (VOO.US), SOXL, and QQQ, among other popular investment targets. In addition, companies such as SpaceX, Micron Technology (MU.US), Advanced Micro Devices (AMD.US), and SanDisk (SNDK.US) also ranked among the most actively traded stocks by Fidelity users, with buy orders for some stocks at least twice as many as sell orders.

Since the COVID-19 pandemic, “buying the dip” has become one of the most representative trading strategies among US retail investors. During the early market collapse at the outset of the pandemic in 2020, retail investors were one of the few groups to buy against the trend. As the market subsequently rebounded strongly, many investors who persisted with bottom-fishing made considerable returns and further cemented the investment belief that long-term market uptrends mean every dip is a buying opportunity.

However, as leveraged products become more popular, some market participants have begun to worry that investors may be underestimating the risks during sustained downtrends.

Steve Sosnick, chief strategist at Interactive Brokers, said: “The notion of buying the dip is deeply ingrained in the psychology of active investors. Since many people previously made profits with leveraged long products during rallies, they are still committed to using these tools now.”

However, he warned: “I worry that we now have a generation of investors who would rush into the building when the fire alarm sounds.” This metaphor reflects the concerns of market participants about retail investors’ risk awareness: The bottom-fishing strategy, which has worked well in the past, may not succeed in every market downturn.

Although there was a rebound in US stocks on Friday, some seasoned traders still hesitate to significantly increase their risk exposure. Sinisa Sorgic, who has 20 years of trading experience and works at proprietary trading firm Bright Trading, said he was cautiously buying some heavily hit chip stocks, but was concerned that there might be another sell-off early next week, so he was unwilling to go all-in.

Sorgic had shorted TSMC (TSM.US) on Thursday, but as its US shares rebounded as much as 7.8% on Friday, his short position took a loss. “It’s a dangerous time right now. I’m nervous, and I hope I can sleep well at night,” Sorgic said. He added: “Yesterday was a bloodbath. The market is too volatile right now—it’s not time yet to go in full force and buy the dip.”

Overall, retail investors still showed a tendency to buy the dip after this round of US stock market plunges, but compared to their aggressive stance during previous corrections, buying this time is clearly more cautious.

It is especially noteworthy that some retail investors are still concentrating on buying highly leveraged tech stock ETFs, reflecting that while investors are concerned about market volatility, they have not completely abandoned high-risk trading strategies.

As ongoing geopolitical uncertainties and concerns about the AI industry's outlook continue to impact market sentiment, whether retail investors can once again profit from buying the dip will still depend on the subsequent trend of US stocks. The relatively modest buying on Friday also illustrates that even the most steadfast bottom-fishing force of the past has now begun to reassess market risks.