Schwab trading index: Were AI and meme stocks in or out of favor in May?

Schwab clients were net buyers of equities in May according to the firm’s newly released analysis of a sample of millions of funded accounts.

The firm’s trading activity index known as STAX reveals a slight increase month-over-month to a score of 49.05 (from 48.87 in April), reflecting more bullish sentiment among investors, although only a ‘moderate-low’ ranking compared to historic averages.

But what did the behavior-based analysis reveal about investors’ stock positions in a period where U.S. equity markets rebounded from the volatile price swings that characterized the April period?

“As they were in April, Schwab clients were net buyers of equities during the May STAX period as they increased exposure to technology-related names, especially those related to AI Intelligence chip makers and the e-commerce and media companies that rely on them,” said Joe Mazzola, head Trading & Derivatives Strategist at Charles Schwab. “Despite a significant amount of buzz, we didn’t see any of the so-called ‘meme stocks’ rising to the top of the most bought or sold names in May, although we did note that interest in those names was significantly greater among Schwab’s younger clients than it was across the general client population.”

May gave investors a lot to think about as the S&P 500, Dow Jones Industrial Average, and Nasdaq all reached new highs, the Cboe Volatility Index tumbled to near historic lows, inflation and Treasury yields provided headwinds, and economic data was mixed.

The equities in the sights of Schwab clients in May included:

• NVIDIA Corp. (NVDA)
• Advanced Micro Devices Inc. (AMD)
• Tesla Inc. (TSLA)
• Amazon.com Inc. (AMZN)
• Microsoft Corp. (MSFT)

Meanwhile, those sold included:

• Apple Inc. (AAPL)
• Alibaba Group Holding Ltd. (BABA)
• Bank of America Corp. (BAC)
• Snap Inc. (SNAP)
• Exxon Mobil Corp. (XOM)