Retail favorites beat out the broader market for third straight year

(Artur Widak/Getty Images)

Retail traders’ favorite stocks best the market for third straight year

Maybe the “dumb money” knows something.

1/2/26 3:56PM

With 2025 done and dusted, it seems we can say it was another strong year for the individual investors who’ve flocked to stock trading in recent years.

The “seems” above is used advisedly, as there’s no clear-cut benchmark that’s an authoritative measure of individual investor activity and returns. That’s because it’s famously difficult to objectively assess which of the billions of shares that are traded every day belong individuals rather than other forms of investors.

But Wall Street provides a few indicative answers that it was a good year for the unwashed masses.

In a statement issued Friday, market maker Interactive Brokers stated that “individual clients achieved an average return of 19.2%, compared with the 17.9% return of the S&P 500 Index.” (That’s a total return for the S&P 500.)

And Goldman Sachs’ themed basket of stocks the bank identified as “retail favorites” beat the broader S&P 500 for the third straight year, notching a gain of 30.5% compared to the blue chips’ 16.4% rise.

In a note issued earlier in December, JPMorgan analysts who follow activity from retail traders noted that in terms of buying and selling ETFs, retail investors did better than the broader S&P 500 and Nasdaq 100 “to their larger Tech bias and successful risk taking in precious metals.”

And in single stocks, their focus on AI trades put the performance of retail traders far ahead of the broader market, with gains of more than 40% through early December, JPM said.

Much of last year’s success — as avid Sherwood News readers know — stemmed from retail investors’ decision to gird their collective loins and buy the steep dip associated with President Trump’s hard-line tariff announcement that month, using the broader market panic to load up on shares of favorites like Nvidia, Tesla, and Amazon, among others.

While acknowledging the nerve it took to buy that dip, last year’s retail outperformance can’t be attributed to trading savvy alone.

For instance, part of the gains registered by Goldman’s basket of retail favorites is also due to the fact that the prices of such stocks tend to mirror the overall move for the market, but in an exaggerated way.

Known has “high-beta” in Wall Street jargon, this characteristic means that when the overall market is up, these stocks are up a lot more. When the market is down, they tend to take a beating that’s even worse. And last year, the market was up.

Tasha Matsumoto, Nate Becker

14m

Stocks jump as Trump walks back European tariff threats

All sector ETFs traded higher in the broad-based rally.

Benny, the mascot for the Chicago Bulls, performs during a break between the Bulls and the New Orleans Pelicans at the United Center on January 14, 2017 in Chicago, Illinois.

Matt Phillips4h

Intel soars amid retail engagement, analyst chatter

Intel ripped toward a new 52-week high Wednesday, amid a flurry of activity in the options market and a couple of positive analyst assessments ahead of its earnings report due tomorrow.

Shortly after 11 a.m. ET, call options activity was roughly equivalent to the full-day average over the past 10 sessions. Bets on stock swings using call options have become a highly popular retail trade, suggesting that retail investors are getting interested in the shares ahead of the report from the partially nationalized American chip icon.

(That interpretation is buttressed by what we’re seeing on social sentiment-monitoring sites like SwaggyStocks, which at about 11:30 a.m. listed Intel as the fifth-most-mentioned stock on Reddit’s r/WallStreetBets forum over the past 24 hours.)

Wall Street analysts are also chattering about the stock, with RBC and Bernstein Research both writing about it in the last 24 hours.

RBC — which has a “sector perform” (or neutral) rating on Intel — said it expects a “slight beat and largely inline outlook” when the company reports after the close Thursday.

Bernstein’s Intel watchers — who have a “market perform” (also neutral) rating on the stock — seemed a bit more cautious, writing, “Overall numbers going forward still looking high to us. Fundamentals and valuation keep us sidelined.”

“If there is no memory, there’s no AI.”

FLASH FORWARD

ByMattPhillips

WedJan 212026

Matt Phillips6h

BNP upgrades Seagate on more durable cycle

Seagate Technology Holdings was up in early trading after analysts at BNP Paribas upgraded the shares to “outperform” from “neutral” and lifted their price target to $380 a share, implying a gain of almost 15% from where the stock is currently trading.

The maker of the somewhat stodgy technology known as hard disk drives — or HDDs in tech lingo — was one of the top stocks in the S&P 500 for much of last year as it was swept up in the AI data center trade.

Data centers need tons of storage capacity, and demand from hyperscalers has driven up prices and created shortages for disk drives, an industry that is dominated by a duopoly of Seagate and Western Digital. (BNP also maintained its “outperform” rating on WDC in a note Wednesday.)

The analysts at BNP say they pushed by the buy button on the stock after becoming more convinced that the upswing in sales was durable, writing:

“We have witnessed a structural shift happening in HDD industry, toward 1) an effective duopoly, 2) higher mix toward data centers, and 3) disciplined capex investments. These have supported our expectations of long-term, through-cycle profitability for the HDD industry. We are now upgrading Seagate from Neutral to Outperform as we are gaining greater conviction that robust data center storage demand could drive an upcycle longer than we initially expected. We think a secular re-rating of Seagate (as well as Western Digital) to over 20x is justified.”

Nate Becker7h

Stocks jump as Trump backs off European tariff threats, says “I won’t use force” to acquire Greenland

US President Donald Trump said he wouldn’t slap tariffs on several European countries after reaching what he called “the framework of a future deal” on Greenland with NATO’s secretary general.

Stocks extended their gains for the day on the news, having already been up earlier in the day when Trump said in a Davos, Switzerland, speech that he wouldn’t use force to acquire Greenland.

“Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st,” Trump wrote on Truth social Wednesday afternoon. “Additional discussions are being held concerning The Golden Dome as it pertains to Greenland. Further information will be made available as discussions progress.”

Trump’s threats to acquire Greenland had put markets on edge in recent days, including a sharp drop on Tuesday.

Trump told a Davos crowd earlier Wednesday: “We probably won't get anything unless I decide to use excessive strength and force, where we would be frankly unstoppable, but I won’t do that... People thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force.”

He seemed to indicate that Denmark, which owns Greenland, could rebuff the US’s overtures to acquire the country without military retaliation.

“They have a choice. You can say yes and we will be very appreciative. Or you can say no and we will remember,” he said. Throughout his speech, Trump constantly reiterated his desire for the US to own Greenland.

The S&P 500 was up 1.5% while the Nasdaq 100 was up 1.7% as of 2:50 p.m. ET.