Recent tech trends may be changing the game for retail investors | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

In the Spring of 2021, Wall Street stared in bewilderment as a troubled company with questionable financials started to surge to unprecedented levels. As short sellers panicked, everyone wondered what had triggered this momentum for GameStop (GME) .

Ultimately, the world learned that it could be traced to social media, specifically to a Reddit (RDDT) forum called r/WallStreetBets on which retail traders were cheering on GameStop’s rise and encouraging their friends to buy shares, inspired by a Youtuber called Roaring Kitty.

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While the GameStop short squeeze ultimately ended, retail traders continued the hunt for the next one. They rallied behind fellow struggling companies such as AMC Entertainment (AMC) , and even Bed Bath and Beyond.

For years, the r/WallStreetBets crowd cheered on these struggling companies that Wall Street placed bets against, giving rise to the category known as “meme stocks.” But now, data shows that they may be switching gears and zeroing in on much more stable investments.

Retail investors who gave rise to the meme stock craze may be changing how they assess a trade.

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Top tech stocks have been trending on r/WallStreetBets lately

ApeWisdom provides data on which stocks are trending on r/WallStreetBets and other social media forums. For years, names like GameStop and AMC dominated these rankings, and retail traders pushed for another short squeeze.

While they briefly succeeded multiple times, every short squeeze ended quickly, typically with the unstable stock crashing back down to its typical levels. While experts noted that this should be expected when investors bet on a troubled company that Wall Street is betting against, retail investors remained largely undeterred.

However, this trend seems to be shifting.

A look at ApeWisdom over the past few months reveals an interesting shift; the most popular names on social media are some of the market’s most prominent tech stocks such as Nvidia (NVDA) , Tesla (TSLA) , Advanced Micro Devices, (AMD) and Palantir Technologies (PLTR) .

This may be a reflection of the fact that Nvidia, Palantir and AMD are largely seen as some of the market’s most tech stocks and are considered well positioned to capitalize on the ongoing artificial intelligence (AI) boom.

But none fit the definition of a meme stock, as short interest in all three companies remains extremely low and all three have performed extremely well over the past year.

The fact that retail investors are focused on high-growth tech stocks and not the struggling companies they used to love, suggests that they are now assessing investments with conventional logic, and not the contrarian mindset they employed for years.

Is Elon Musk responsible for this new trend?

How did the r/WallStreetBets crowd become interested in strong companies and not risk contrarian gambles? David Materazzi, CEO of trading platform Galileo FX, believes it can be attributed to one person who is well known for influencing investors: Elon Musk.

“Retail traders are not making smarter decisions; they are just following a new “religion”. It’s a shift from meme stocks to AI hype, largely influenced by Musk, OpenAI and the broader AI craze.”

Materazzi also notes that he believes GameStop has been forgotten and that this AI frenzy will continue to influence retail investors, adding that hedge funds have stopped touching struggling stocks, even for shorting purposes.

John Engle, President at Almington Capital, notes that while Tesla has performed well until recently, it has long been a popular name among the r/WallStreetBets crowd, likely due primarily to Musk.

“Tesla has long boasted all the hallmarks of a “traditional” meme stock,” he states: “a valuation detached from fundamentals, a cult-like following that is largely unconcerned with the underlying business, and a tendency to experience big stock moves on limited (if any) new material information. The recent reversal may mean reality is starting to matter at last, but it is always dangerous to proclaim a meme dead.”

Is the meme stock era dead or simply evolving?

Other experts speculate that while retail investors may be focused on new stocks, the contrarian era is far from over. Nick Battista, director of market intelligence at tastylive, highlights the recent surge in quantum computing stocks as an indication that speculative trading is alive and well.

“Rather than GME and AMC flying around we have quantum computing stocks like Rigetti Computing (RGTI) and IonQ (IONQ) , among other fringe speculative names,” he states.

While RGTI has recently surged in popularity across social media investing channels, its popularity could also be attributed to the fact that some experts believe quantum computing is an evolving field that some experts believe will help shape the future of computing and boost AI in the process.

Ryan Jacobs of Jacobs Investment Management sees the retail investing landscape as shifting but not disappearing from the principles that shaped the meme stock frenzy, even as stronger stocks rise in popularity.

“While the move toward Tesla, Nvidia, and Palantir suggests some level of sophistication, speculation still plays a role, particularly regarding Tesla’s cult following,” he notes. “History tells us that speculation never truly disappears—it just changes form.”