Key takeaways:

• Meme stocks’ were back in the spotlight, including on the Selfwealth platform, as short squeezes and Reddit-inspired retail buying drove significant monthly gains for this cohort.

• Money flow for semiconductor stocks such as Nvidia and AMD spiked after the former delivered a strong earnings report that lifted its share price to a record high.

The US share market turned around April’s decline after moderating inflation data and weak consumer spending figures offered investors some optimism that the Federal Reserve may be nearing the start of a rate cut cycle.

However, it was an update from Nvidia that had a pronounced role in driving returns for the tech sector, and lifting the market to an all-time high. In fact, six mega-tech shares accounted for more than 75% of the S&P 500's gain last month.

By the end of the month, the Dow Jones had gained 2.3%, but it was the two other benchmark indices that garnered the most attention, with the S&P 500 and Nasdaq Composite up 4.8% and 6.9% respectively.

On that note, these were the most popular trades on the Selfwealth platform last month.

US share trading activity
It was an eventful month for a handful of shares dubbed ‘meme stocks’ due to their strong support base across online forum Reddit, including some shares that previously ranked as favourites within the Selfwealth community.

The most well-known example, and the most-traded US share in the Selfwealth community last month, was GameStop (NYSE: GME). During the middle of the pandemic, GME was the most held US stock on the Selfwealth platform, before its popularity faded in line with an extended downturn in its share price.

However, GME re-captured the market’s interest last month when one of the original investors involved in the stock’s short-squeeze frenzy at the start of 2021 broke his social media silence. In the immediate aftermath, GME shares soared as much as 179%, albeit volatile trading followed through the rest of the month. Some Selfwealth members took the opportunity to lock in profits or reduce their exposure to GME, with just 43.8% of all GME trades - up more than tenfold over the month - being ‘buys’.

Another popular trade, ranking second last month by volume, was Faraday Future Intelligent Electric (NASDAQ: FFIE). At one stage, the EV manufacturer surged from around US$0.04 per share to over US$1.80 per share, even as it battled to regain listing compliance. In total, 55% of FFIE trades on the Selfwealth platform were ‘buys’, with the stock’s significant short interest a factor supporting the rally.

The GameStop-inspired rally also directly lifted several other ‘meme stocks’, including AMC Entertainment (NYSE: AMC), Innovative Eyewear (NASDAQ: LUCY), and Robinhood (NASDAQ: HOOD).

For AMC, it was the first time since October 2023 that it featured among the top 20 most actively traded US shares in the Selfwealth community, whereas the wait was even longer for HOOD, which last commanded this much attention back in August 2021. The duo posted large double-digit returns for the month, whereas shares in LUCY leapt more than 300% amid strong buying support across the market.

Of the most popular ETF trades, there were new additions to last month’s top 10 by way of the MicroSectors Gold Miners 3X Leveraged ETN (NYSE: GDXU) and ProShares UltraShort Bloomberg Natural Gas (NYSE: KOLD).

Commodity prices may have been conducive to elevated trading interest in both GDXU and KOLD, with gold prices trading at a record high, surpassing US$2,440 per ounce, and natural gas prices climbing approximately 30%.

Meanwhile, the iShares Bitcoin ETF (NASDAQ: IBIT) retained the greatest buying conviction of any major ETF on the platform, with over 80% of all trades being ‘buys.

By trade values, chip stocks were a focal point for larger trade sizes. On this front, Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) ranked 3rd and 7th respectively. The total value of trades in NVDA and AMD were each up more than threefold over the month, far outstripping more modest growth in trade volumes for these names.

The average trade size in Nvidia jumped from around $12,500 in April to over $33,000 in May, which was likely attributable to the company’s latest earnings report. NVDA shares surged past US$1,000 for the first time after announcing nearly US$15 billion in net income during its fiscal first-quarter, compared with US$2 billion a year ago. The semiconductor manufacturer cited strong demand for its artificial intelligence (AI) chips, with its next-gen AI chip set to contribute revenue later this year.

Which US shares are the most held?

On the back of the strong Selfwealth buying mentioned earlier, Nvidia (NASDAQ: NVDA) closed the gap with Tesla (NASDAQ: TSLA) in terms of overall holdings by value.

While NVDA shares gained 26.9% throughout May, the total value of community holdings in NVDA grew by 37.7% month-over-month. That result was enough to deliver a Selfwealth record for the collective value of NVDA shares, while the stock also leapfrogged Microsoft (NASDAQ: MSFT) to finish the month in 2nd spot, yet another record.

However, the biggest improvement over the month was reserved for MicroStrategy (NASDAQ: MSTR), with the collective value of holdings in the business intelligence company increasing by 54%. This result exceeded the stock’s underlying share price increase of 43.1%, with the differential explained by modest Selfwealth buying support. Last month, the company highlighted its upcoming AI software product. At the end of May, MSTR was the 12th most held US share by value.

GameStop (NYSE: GME) was back in the top 20 for the first time since February, even though most of last month’s Selfwealth trading activity, both by trade volumes and trade values, skewed towards selling. GME finished the month in 15th spot, its highest result since the start of the year.

Finally, the iShares Bitcoin Trust (NASDAQ: IBIT) and ProShares UltraPro QQQ (NASDAQ: TQQQ) both recorded double-digit percentage growth in Selfwealth holdings under administration. The gain in IBIT was largely driven by a rise in bitcoin prices, whereas TQQQ benefitted from its leveraged exposure that effectively tripled the returns of the Nasdaq-100 index.

That’s all for this Trade Trends report, stay tuned for the next edition this time next month!