Retail investors' first "rebellion" against NVIDIA: The AI bull market might really be coming to an end

Author: US Stocks Investment Network; Source: X, @TradesMax

Over the past year, almost everyone has been doing the same thing—buying NVIDIA.

Since ChatGPT ignited the AI wave, this company has been on a tear. It hasn’t only become a core driver of global AI computing power, but it also briefly topped the S&P 500 by market value. More importantly, it’s not just institutions that have pushed the stock price to the extreme—it’s a steady stream of retail capital.**

But a very dangerous signal has appeared.

Retail investors have started selling.

According to the latest data from U.S. stock big data platform StockWe.com, on Wednesday, individual investors net sold Nvidia for the first time since last July. This is not a routine trimming—it’s a “behavioral inflection point,” meaning that the most steadfast buyers in the market have begun to waver.

The significance of this goes far beyond what it looks like on the surface.

1. The core of the AI market isn’t fundamentals—it’s “faith trading”

Many people think this rally is driven by fundamentals.

But if you break the structure down, you’ll find:

• Institutions: early positioning, and later more of a “follow the trend”

• Retail investors: continuous adding, the core source of incremental buy pressure

In other words, the real fuel of an AI bull market is retail investors chasing the upside continuously.

And NVIDIA is the “faith core” of this system.

Once this core starts to loosen, the market logic changes—from “buy the dip no matter what” to “take profits when it’s high.”

2. Why is it happening now? Three key variables are reversing

This shift by retail investors isn’t a random event—it’s the result of three forces stacking up:

1) Geopolitical conflict disrupting risk appetite

Escalation in the Middle East situation has made the market abruptly switch back from the “AI narrative” to “macro risk.” When risk rises, the first assets to be discarded are often those with the biggest price gains and the highest valuations.

And the AI leader is the most classic example of a “crowded high-consensus trade.”

2) AI trading is entering the “late stage”

Any theme-driven market typically goes through three phases:

• Tell the story (expectations)

• See growth (realization)

• Fight over valuation (tug-of-war)

AI is clearly already in the third phase.

This means: the upside no longer relies on logic—it relies on capital follow-through.

Once capital starts to hesitate, volatility will surge dramatically.

3) Retail behavior begins to “reflexively reverse”

Over the past year, retail behavior has been: buy the rise → push prices higher → attract more buy pressure → rise again.

But now, the chain is reversing: sell → push prices lower → trigger panic → more selling.

This is a typical reflexivity inflection point in a trend.

3. What does this mean? Not a crash, but the risk structure changes

It’s crucial to be clear here:

This doesn’t mean the AI rally is over, and it doesn’t mean NVIDIA will drop immediately.

What truly changes are three things:

• Volatility will rise, shifting from one-way upside to range-bound chop at high levels

• Drawdowns will be deeper: the past “-5% already had buyers come in,” but now it could be -10% or even more

• Rotation will accelerate: capital begins shifting from the “most crowded AI core” to second-tier AI, low-valuation tech, and even cyclical stocks

4. A more important question: who will be the one taking the bid?

When retail investors start selling, the market has to answer one question: who will buy it?

• If institutions step in—this indicates healthy rotation, and the uptrend can still continue;

• If nobody steps in—then it’s not a pullback, but the beginning of a trend’s end.

At present, the answer is still not clear.

But what can be confirmed is that the phase where people could make money just by “mindlessly buying NVDA” is already over.

5. Where are the real trading signals?

If you’re a trader, here’s a more practical observation framework:

Next, focus on three things:

• Whether NVIDIA is continuously being net sold (not just one day’s data)

• Whether the AI sector shows “leading stocks covering for laggards”—i.e., leaders catching up while others underperform

• Whether capital starts flowing into non-AI sectors

If all three happen at the same time—then it’s not just volatility; it’s a style rotation.

Commentary

The market never ends when it’s hottest, but it will show cracks when the most steadfast people begin to waver.

And this time, the crack appears in retail investors.

The AI bull market hasn’t ended, but it’s no longer as safe as it used to be.