Key takeaways:

• Trade numbers spiked across tech stocks amid AI speculation, while money flow continued to pour into bank shares

US markets delivered a barnstorming month on the back of tech strength, as the frenzy surrounding artificial intelligence (AI) went into overdrive.

Across the course of the month, the Nasdaq Composite surged 5.8% higher, whereas the fortunes of the S&P 500 and Dow Jones were mixed, with the former eking out a monthly rise of 0.3%, and the latter falling 3.5%.

What did the tech rush mean for the Selfwealth community? Let take a look at what investors bought and sold throughout May.

US share trading activity

One of the names that has become synonymous with the AI rush, in no small part thanks to its financial backing of the team behind ChatGPT, Microsoft (NASDAQ: MSFT) was the third most actively traded stock last month. That is the tech giant highest ranking since January, and trade numbers were up more than 30% versus the month prior. 

With the stock pushing towards a fresh all-time high, there is little doubt that trading interest has been underpinned by euphoria about the company AI exposure, and there was also some profit taking from those that feel the stock has had its run. That also goes to the heart of the trading action last month, where 51.5% of trades were buys, and 48.5% were sell orders.

A closer look at trading action in Tesla (NASDAQ: TSLA) also sheds light on some interesting behaviour. While the stock is still the most actively traded name on the Selfwealth US trading platform, the buy-sell ratio dropped to its lowest level since July last year. The stock gained 24% in May, but the lower buy-sell ratio may have something to do with investors taking money off the table and rotating into other names.It was a not too dissimilar story for semiconductor giants Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD). In many respects, the former was in some ways the poster child for the AI movement last month, unveiling a strong sales outlook that it says is being driven by unprecedented demand for its AI-optimised microchips. 

That frenzy flowed through to the rest of the semiconductor sector, but Selfwealth members responded with caution as share prices soared among this cohort. As such, the majority of trades in these names were sell orders, which again, might suggest some concerns about valuations in light of the uncertain economic outlook.

Top 20 stocks by tradesCode Security

Buy-sell Ratio

1TSLATesla - 63.4%

2GOOGLAlphabet - 55.9%

3MSFTMicrosoft - 51.5%

4NVDANvidia - 45.5%

5AMZNAmazon - 64.2%

6AAPLApple - 51.4%

7AMDAdvanced Micro Devices - 48.5%

8SQQQProShares UltraPro Short QQQ ETF

55.4%

9BACBank of America

60.5%

10METAMeta Platforms

41.8%

11TQQQProShares UltraPro QQQ

66.7%

12BOILProShares Ultra Bloomberg Natural Gas

53.6%

13PYPLPayPal

89.1%

14PLTRPalantir

64.8%

15CCitibank

51.9%

16UVXYProShares Ultra VIX Short Term Futures ETF

46.0%

17DISWalt Disney 

80.9%

18BABAAlibaba

69.8%

19PACWPacWest Bancorp

51.3%

20VOOVanguard 500 Index Fund ETF

70.3%

While tech was the main focal area for trades, money flow across US stocks last month was largely skewed towards the banking sector. The value of shares traded in Citibank (NYSE: C) and Bank of America (NYSE: BAC) surged 58.4% and 81.1% respectively month-over-month, reaching new records for the Selfwealth community. The vast majority of this activity was driven by members with significant portfolio balances.Regional banking peer PacWest Bancorp (NASDAQ: PACW) was also among the most actively traded stocks in May, making its first appearance on this list. At the start of the month the bank released a deposit update, indicating deposits declined 9.5% during the week of May 5, after the collapse of First Republic Bank. 

The update sparked a surge in trading, as Selfwealth members took different views regarding the outlook for the bank. Later in the month, news that the bank sold US$2.7 billion in real estate construction loans sat well with the market, and attracted further modest buying interest.

Shares in PayPal (NASDAQ: PYPL) shed 18% in May, but that didn't stop buyers from stepping up. As it turns out, more than 80% of money flow for PayPal was driven by buyers, with the beaten-down stock seemingly attracting those wagering on a turnaround. PayPal quarterly report highlighted slowing revenue growth, which it appears was behind the stock trading at a near six-year low.Another name watched closely by the Selfwealth community was Airbnb (NASDAQ: ABNB). The accommodation portal suffered an unfortunate month after announcing bookings and average daily rates are expected to decline in the current quarter versus last year. At one stage, the stock experienced its largest one-day drop since 2020 as demand concerns emerged. ABNB was the 15th most traded stock by value last month.

Top 20 stocks traded by valueCode Security

Buy-sell Ratio

1. BAC Bank of America - 50.2%

2. C Citibank - 50.2%

3. SQQQ ProShares Ultra Pro Short QQQ ETF - 49.7%

4. MSFT Microsoft - 49.2%

5. TSLA Tesla - 53.8%

6. AAPL Apple - 48.4%

7. TQQQ ProShares UltraPro QQQ - 53.3%

8. PACW PacWest Bancorp - 50.6%

9. UVXY ProShares Ultra VIX Short Term Futures ETF - 49.7%

10. GOOGL Alphabet - 47.1%

11. 11FNGD Bank of Montreal MicroSectors FANG Index 3X Inverse Leveraged - 49.7%

12. LABU Direxion Daily S&P Biotech Bull 3X Shares ETF - 50.3%

13. LABD Direxion Daily S&P Biotech Bear 3X Shares - 50.6%

14. FNGU Bank of Montreal MicroSectors FANG Index 3X Leveraged - 50.0%

15. ABNB Airbnb - 53.8%

16. AMD Advanced Micro Devices - 53.3%

17. BOIL ProShares Ultra Bloomberg Natural Gas - 47.6%

18. AMZN Amazon - 43.2%

19. PYPL PayPal - 83.9%

20. NVDA Nvidia - 40.4%

Which US shares are the most held?

Alphabet (NASDAQ: GOOGL) moved one spot higher into fourth position among the most popular US stocks in the Selfwealth community. Collective holdings in the tech giant were up more than 12% last month, broadly in line with the performance of the stock, which received a boost amid the AI rally. Google is behind conversational generative artificial intelligence chatbot Bard, which positions it as one of the key players in the AI space.Another beneficiary of the excitement around AI was Palantir (NYSE: PLTR). After an absence last month, the stock returned to the list of the top 20 most held US shares. The company is an operator of AI data mining platforms for government agencies and enterprises, with artificial intelligence at the centre of its software. That was enough to see the PLTR share price skyrocket 89.8% last month.On the other hand, there were negative movements for stocks like Royal Bank of Canada (NYSE: RY), Berkshire Hathaway (NYSE: BRK.B), and Enbridge (NYSE: ENB), where holdings each declined by double-digit percentages. The trio lost ground as the likes of the financials and energy sectors were overlooked in favour of tech, with each stock down one position into 5th, 8th, and 17th position respectively.

US StockCompany

1. TSLA Tesla

2. AAPL Apple

3. MSFT Microsoft

4. GOOGL Alphabet

5. RY Royal Bank of Canada

6. AMZN Amazon

7. META Meta Platforms

8. BRK.B Berkshire Hathaway

9. NVDA Nvidia

10. BABA Alibaba

11. GME GameStop

12. VOO Vanguard 500 Index Fund ETF

13. PLTR Palantir

14. TQQQ ProShares UltraPro QQQ

15. AMD Advanced Micro Devices

16. QQQ Invesco QQQ Trust Series 1

17. ENB Enbridge

18. ARKK ARK Innovation ETF

19. PYPL PayPal

20. TD Toronto-Dominion Bank

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