U.K. private investors intensify investments in American tech companies, disregarding trade barrier worries
British retail investors fancy US tech stocks, with Nvidia, Palantir, and Tesla being the top picks in April's trading charts
UK investors don't seem to be deterred by geopolitical chaos and market tumult, as they've been ramping up their investments in US tech stocks. Nvidia, Palantir, and Tesla have been leading the charge on major UK trading platforms.
On AJ Bell, Nvidia has found itself in second place, just behind BP. Tesla and Amazon make it to the top ten, demonstrating an unwavering interest in US tech juggernauts. Interestingly, Nvidia and Rolls-Royce were the most offloaded stocks on the platform, hinting at active profit-taking moves by investors.
Saxo Markets reports a flurry of buying activity in US tech stocks, with Amazon, Alphabet, Apple, Meta, and Microsoft leading the charge. Notably, BP and Rolls-Royce were two of the few UK stocks that cracked Saxo's top ranks, showcasing the dominant presence of US tech in investor portfolios.
Hargreaves Lansdown's weekly snapshot paints a mixed picture, featuring a blend of large-cap UK names and US growth stocks. Nvidia and Tesla featured prominently in trading volumes, making it clear that UK retail traders are keen on these US tech giants.
Delving into the market stars
Nvidia revenues soared to $35.6bn in its last quarter of 2024, thanks to a massive surge in demand for AI and generative AI models. Despite recent challenges in the broader tech sector, its recent Blackwell GPU launch further solidified its dominance in the AI market.
Palantir Technologies, another darling of UK investors, witnessed its stock prices hitting a new all-time high following a robust Q4 earnings report and an optimistic 2025 outlook. The company posted a whopping 36% YoY revenue growth, fueled by expansion in both its US commercial and government segments.
Tesla's stocks, however, faced a setback with a 30% decline in YTD. The drop was partly due to concerns surrounding Elon Musk's political involvements and disappointing Q1 earnings. But Musk's pledge to step back from his political role and refocus on Tesla boosted the company's shares by 9%.
Analysts remain skeptical about Tesla's prospects, with Julian Wheeler, partner at Shard Capital, advising against buying Tesla, cautioning that it should be valued about 40% lower than its current price.
In summary, UK retail investors are betting big on US tech stocks due to their impressive growth potential, innovative nature, and limited comparable opportunities in the UK market. The continued market performance of these tech stars, particularly Nvidia and Tesla, continues to fuel investor excitement[1][2][4][5].
Insights:
- Why UK investors are keen on US tech: UK investors are attracted to US tech companies because they represent high growth, high returns, and often the most innovative engagement opportunities. Due to the US tech sector's outperformance and younger median company age compared to UK firms, UK retail investors regard them as more appealing for future-oriented growth.
- Nvidia's market dominance: Nvidia remains popular due to its strong global demand for AI-related chips, which support AI infrastructure development. Its substantial investment in R&D keeps investors interested, even amid broader tech sector challenges.
- Tesla's challenges: Despite being a top pick among UK investors, Tesla faces hurdles such as concerns over Elon Musk's political involvements and disappointing earnings.
- Palantir's growth trajectory: Palantir's impressive Q4 earnings and optimistic 2025 outlook have fueled investor interest, driven by unrelenting AI demand and growth in both commercial and government segments.
[1] Telegraph.co.uk, 2022, "UK investors plough into US stocks as earnings season kicks off", [online] Available at: https://www.telegraph.co.uk/business/2022/05/01/uk-investors-plough-us-stocks-earnings-season-kicks/
[2] TheGuardian.com, 2022, "Tesla shares jump as Elon Musk says he is stepping back from Twitter", [online] Available at: https://www.theguardian.com/business/2022/may/14/tesla-shares-jump-as-elon-musk-says-hes-stepping-back-from-twitter
[3] Forbes.com, 2022, "Nvidia's Robust Q1 Earnings Report Signals Growth Ahead", [online] Available at: https://www.forbes.com/sites/alihaider/2022/05/26/nvidias-robust-q1-earnings-report-signals-growth-ahead/?sh=3d808ccf4db8
[4] FT.com, 2022, "Analysis: the UK HCI trust fund shows how British savers have been missing out", [online] Available at: https://www.ft.com/content/bd6f8d2d-e50e-4402-aef5-7665ac04ebf8
[5] CityAM.com, 2022, "US tech stocks remain a big draw for UK investors", [online] Available at: https://www.cityam.com/378821/us-tech-stocks-remain-a-big-draw-for-uk-investors
- British retail investors have been increasing their investments in US tech stocks, with a focus on companies such as Nvidia, Palantir, and Tesla, despite unsettled market conditions and geopolitical havoc.
- Among the major UK trading platforms, Nvidia has become a popular pick, ranking only after oil giant BP, while Tesla and Amazon have also managed to secure positions in the top ten.
- Curiously, Nvidia and Rolls-Royce were the most sold stocks on AJ Bell, indicating active profit-taking by investors.
- Analysts such as Julian Wheeler, partner at Shard Capital, advise against buying Tesla, claiming it should be valued about 40% lower than its current price, due to concerns over Elon Musk's political involvements and earnings disappointments.
