Retail investors sell Microsoft, Palantir as semiconductor ETFs draw inflows

Retail investors have started cutting exposure to software stocks in May 2026, with Microsoft Corp. (MSFT) and Palantir Technologies Inc. (PLTR) among the biggest targets for profit-taking, JPMorgan strategist Arun Jain said in a May 14 note. Microsoft shifted from the second-most-bought stock in April 2026, behind Tesla Inc. (TSLA), to the second-most-sold stock month to date in May and the most-sold stock in the week ended May 8. Palantir remains under valuation scrutiny, trading at about 97 times forward earnings, more than four times the S&P 500’s multiple. Retail investors are still adding to semiconductor exposure, including Intel Corp. (INTC), the iShares Semiconductor ETF (SOXX), VanEck Semiconductor ETF (SMH) and Roundhill Memory ETF (DRAM). Goldman Sachs strategist Daniel Chavez said retail trading volumes have risen 28% since mid-April 2026, while a basket of retail-favored stocks has gained 29%. Retail activity recently accounted for about 20% of U.S. equity trading volume, up from 15% a decade ago but below the 24% peak in 2021.