Retail Investors' Growing Influence in the Stock Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Should l Buy META?
Source: NASDAQ.COM
- Market Share of Retail Investors: According to 'The Retail Investor Report,' retail investors accounted for approximately 25% of total equity trading volume in 2021, doubling from a decade earlier, highlighting their increasing significance in the market and prompting online brokers to adjust strategies to attract this demographic.
- Popularity of Robinhood: Robinhood has successfully attracted a large number of retail investors by offering commission-free trading and fractional share purchases, with its '100 Most Popular' leaderboard showing that the Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust rank as the fifth and ninth most held securities, reflecting retail investors' preference for S&P 500 exposure.
- Rise of Bond ETFs: The Vanguard Total Bond Market ETF has become the tenth most held security on Robinhood, indicating retail investors' concerns about lofty stock valuations, especially as the Shiller P/E ratio of the S&P 500 approaches historical highs, leading them to seek safer income investments.
- Impact of Expense Ratios: The Vanguard S&P 500 ETF's net expense ratio of 0.03% is significantly lower than SPDR S&P 500 ETF Trust's 0.0945%, which can lead to substantial savings for long-term investors, further driving retail preference for Vanguard ETFs.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for META is 824.71 USD with a low forecast of 655.15 USD and a high forecast of 1117 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 670.210
Low
655.15
Averages
824.71
High
1117
Current: 670.210
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Retail Investors' Growing Influence in the Stock Market
- Market Share of Retail Investors: According to 'The Retail Investor Report,' retail investors accounted for approximately 25% of total equity trading volume in 2021, doubling from a decade earlier, highlighting their increasing significance in the market and prompting online brokers to adjust strategies to attract this demographic.
- Popularity of Robinhood: Robinhood has successfully attracted a large number of retail investors by offering commission-free trading and fractional share purchases, with its '100 Most Popular' leaderboard showing that the Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust rank as the fifth and ninth most held securities, reflecting retail investors' preference for S&P 500 exposure.
- Rise of Bond ETFs: The Vanguard Total Bond Market ETF has become the tenth most held security on Robinhood, indicating retail investors' concerns about lofty stock valuations, especially as the Shiller P/E ratio of the S&P 500 approaches historical highs, leading them to seek safer income investments.
- Impact of Expense Ratios: The Vanguard S&P 500 ETF's net expense ratio of 0.03% is significantly lower than SPDR S&P 500 ETF Trust's 0.0945%, which can lead to substantial savings for long-term investors, further driving retail preference for Vanguard ETFs.
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- Infrastructure Bottlenecks: Pichai emphasized that factors such as power availability, land, and supply chain issues have emerged as critical bottlenecks for Google's data center expansion, impacting the company's growth potential in the AI sector.
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See More
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- AI Budget Surge: Meta plans to increase its capital expenditures to $135 billion in 2026, an 87% rise from last year, aimed at supporting its AI Superintelligence team, which is expected to drive future technological innovation and market competitiveness.
- Profitability Pressure: As capital expenditures rise, Meta's depreciation expenses increased by 20% in 2025 and are expected to rise further in 2026, leading to a decline in operating margin from 48% in Q4 2024 to 41%, although management still anticipates overall operating income growth.
- AI-Driven Revenue Growth: Meta achieved a 24% revenue growth in Q4, driven by increased user engagement and stable ad price hikes, demonstrating its effectiveness in AI applications and market potential.
- Generative AI Potential: Meta is planning to leverage generative AI to attract more advertisers, combining personalized content and shopping agent features, which is expected to generate substantial ad revenue and further solidify its market position.
See More
Meta Tests Standalone Platform 'Vibes'
- Standalone App Testing: Meta is testing the standalone 'Vibes' platform, which allows users to create and share only AI-generated videos, aiming to enhance user experience and attract more content creators.
- User Growth Trend: Since its launch within the Meta AI app in September last year, 'Vibes' has gained strong early user engagement, with Meta noting that users are increasingly leaning into this format for creation and sharing.
- Immersive Experience: The new app provides a focused and immersive environment designed to enhance the experience of creating and discovering AI-generated videos, thereby driving user engagement and community interaction.
- Future Expansion Plans: Meta indicated plans to further expand the app based on community feedback, demonstrating the company's commitment to user needs and strategic positioning for future growth.
See More
S&P 500 Index Could Reach 15,000 by 2030
- Future Growth Outlook: Tom Lee from Fundstrat predicts that the S&P 500 index will reach 15,000 by 2030, implying a 120% upside from its current level of 6,830, presenting significant potential returns for investors.
- ETF Investment Advantage: The Vanguard S&P 500 ETF provides exposure to approximately 80% of U.S. equities and 50% of global equities by market value, offering broad access to many of the world's most influential stocks, particularly in the technology sector, enhancing portfolio diversity and potential returns.
- Strong Historical Performance: Over the past two decades, the S&P 500 has advanced 439%, compounding at an annual rate of 8.7%, and with dividends included, the total return reached 700%, compounding at 10.9%, demonstrating the wealth creation capability of long-term holding.
- Generational Wealth Transfer: Millennials are set to inherit $80 trillion and are reshaping the economy as they enter their peak earning years, combined with a predicted global labor shortage, which is expected to drive demand for technology stocks, further boosting the performance of the S&P 500 index.
See More
Global AI Market Expected to Expand 25-Fold
- Market Size Forecast: According to a report by UNCTAD, the global AI market is expected to reach $4.8 trillion by 2033, driven by hundreds of billions in investments, highlighting significant opportunities in the sector.
- ETF Investment Strategies: Five AI ETFs offer varying strategies, with the Global X Robotics & AI ETF focusing on industrial applications for better diversification, while the First Trust Nasdaq ETF allocates 60% to 'engagers', emphasizing robotics.
- Active Management Advantage: The Roundhill Generative AI & Technology ETF targets around 50 companies and is actively managed, allowing it to adapt to market changes, although it carries a higher expense ratio of 0.75%, its potential for boosting enterprise productivity remains attractive.
- Emerging Fund Performance: The iShares AI Innovation & Tech Active ETF launched in late 2024 with $8.6 billion in assets, focusing on U.S. mega-cap companies, and its active management strategy is seen as advantageous in a rapidly evolving market.
See More
Retail Investors' Growing Influence in the Stock Market
- Market Share of Retail Investors: According to 'The Retail Investor Report,' retail investors accounted for approximately 25% of total equity trading volume in 2021, doubling from a decade earlier, highlighting their increasing significance in the market and prompting online brokers to adjust strategies to attract this demographic.
- Popularity of Robinhood: Robinhood has successfully attracted a large number of retail investors by offering commission-free trading and fractional share purchases, with its '100 Most Popular' leaderboard showing that the Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust rank as the fifth and ninth most held securities, reflecting retail investors' preference for S&P 500 exposure.
- Rise of Bond ETFs: The Vanguard Total Bond Market ETF has become the tenth most held security on Robinhood, indicating retail investors' concerns about lofty stock valuations, especially as the Shiller P/E ratio of the S&P 500 approaches historical highs, leading them to seek safer income investments.
- Impact of Expense Ratios: The Vanguard S&P 500 ETF's net expense ratio of 0.03% is significantly lower than SPDR S&P 500 ETF Trust's 0.0945%, which can lead to substantial savings for long-term investors, further driving retail preference for Vanguard ETFs.
See More
Google CEO Highlights AI Demand Outpacing Capacity Constraints
- Surging AI Demand: Google CEO Sundar Pichai highlighted during the earnings call that the rapid rise in AI demand has become the company's biggest near-term challenge, particularly as its 'AI-first' strategy collides with real-world constraints.
- Infrastructure Bottlenecks: Pichai emphasized that factors such as power availability, land, and supply chain issues have emerged as critical bottlenecks for Google's data center expansion, impacting the company's growth potential in the AI sector.
- Strong Financial Performance: Alphabet reported fourth-quarter revenue of $113.83 billion, exceeding market expectations of $111.31 billion, reflecting an 18% year-over-year growth driven by robust performance across all business segments.
- Future Investment Plans: The company anticipates capital expenditures ranging from $175 billion to $185 billion by 2026, primarily aimed at expanding AI computing capacity and strengthening technical infrastructure to support cloud growth.
See More
