Retail Is (Back) in Control of the Stock Market — Like It or Not
SPACs are back. The IPOs are blockbuster. The valuations are stupid. Is it 2021 all over again?
Only if there’s such a thing as Dec. 233 (not a typo).
It was slow going for growth stocks and retail investors for years; what felt like eons as some ailing names halved. Some went to zero. But in 2025, even in the face of still-high interest rates, tariff troubles, and geopolitical tremors, the Main Street crowd is once again leaving its mark on Wall Street.
Their own interest and twist: They were greedy while others were fearful, buying the April tariff tumble and helping put the tech-heavy Nasdaq-100 back on its feet. But by comparison, the N100’s 10.6% year-to-date performance — although something of a miracle comeback — pales in comparison to the returns that retail is pulling out of growth names across fintech, aerospace, AI, healthtech, and energy. In a way, individual investors are collectively shaping the market in their own image, with some of the stocks they champion among the best performers of the year.
- Retail-popular stocks like AI lender PagayaPGY, nuclear power aspirant OkloOKLO, and satellite firm AST SpaceMobileASTS are among the best performers this year — up 228%, 191%, and 168% respectively.
- Market newcomers like CircleCRCL, CoreWeaveCRWV, and AIROAIRO have scored triple-digit returns this year — up 595%, 214%, and 128% respectively, courtesy the retail crowd’s investment in new IPOs.
Don’t Fight the Tape
It used to be that Main Street would “follow the money,” but as retail-popular stocks — which exhibit lower institutional ownership, higher retail and insider ownership, and greater social buzz — have seen greater returns, Wall Street has perked up.
- PalantirPLTR, Super MicroSMCI, and CoinbaseCOIN have joined the S&P 500 in the last year after becoming retail popular stocks; they’ve continued contributing to the index’s returns, up 101%, 72%, and 62%, respectively, YTD.
- Taking note, institutional ownership has piled into retail-popular plays like RobinhoodHOOD, +168% YTD), Hims & HersHIMS, +90%), and Rocket LabRKLB, +89%).
Forward-looking: Main Street made bad investment decisions in 2020 and 2021. Will 2025 be a repeat? At first glance, the valuations of many retail-popular stocks are much steeper than comparables in the Nasdaq-100 index, but largely immune from trade policy, retail’s 2025 picks seem to be heading in the right direction for now — identifying their next trade could offer opportunities not just to outperform, but frontrun an an increasingly invested (literally) Wall Street.