From Tesla ETF to "the next Nvidia," the retail army in the US stock market is chasing bigger risk bets
Leverage funds are flooding into Tesla, with Direxion Daily TSLA Bull 2X Shares setting a record for the largest weekly inflow since its inception last week. Palantir has surged 75% this year, currently valued at 71 times its expected sales, making it the most expensive stock in the S&P 500. Cloud computing leasing company Coreweave has seen its stock price quadruple since its listing in March
When retail investors poured $651 million into Tesla's leveraged ETF within a week, and Palantir became the most expensive stock in the S&P 500 with a 71 times price-to-sales ratio, the market's risk appetite reached a new high.
According to data compiled by Bloomberg on Tuesday, leveraged funds have been flooding into Tesla, with investors injecting $651 million into Direxion Daily TSLA Bull 2X Shares, setting a record for the largest single-week inflow since the fund's inception in 2022. The largest inflows occurred on Thursday and Friday of last week, reflecting the extreme desire of retail investors for speculation.
In the field of artificial intelligence, investors are frantically searching for the next Nvidia-like skyrocketing target. Palantir has surged 75% this year, currently valued at 71 times its expected sales, making it the most expensive stock in the S&P 500. Cloud computing leasing company Coreweave has seen its stock price quadruple since its listing in March. These valuation levels have far exceeded the reasonable range supported by fundamentals.
The tech giants' heavy investments in computing infrastructure have further fueled the fire. Zuckerberg is even personally managing a new AI project, which comes with plans for a multi-billion dollar investment in Scale AI.
Additionally, Bitcoin has climbed back to around $110,000, meaning that every purchase made by MicroStrategy under Michael Saylor over the past four years is now profitable.
Since Saylor began investing the cash on the balance sheet of this enterprise software manufacturer into Bitcoin in mid-2020, MicroStrategy has announced approximately 70 independent purchases. According to data compiled by Bloomberg, this includes 15 purchases of Bitcoin valued at $1 billion or more. With Bitcoin's price fluctuations over the years, many purchases have experienced periodic losses.
The recent rebound in Bitcoin's price not only vindicates Saylor's gamble but also provides a new "success story" for the retail army's risk chase—although this success is likely just another replay of a cyclical bubble
