Retail investors are still pursuing the artificial intelligence trade but have become more selective, reducing direct stock purchases while increasing the use of put options and inverse ETFs. Vanda Research data shows that, among the 12 stocks most favored by retail investors in 2026, put buying nearly doubled from the first quarter and rose from about 26% to 110% of net cash buying. Since mid-April, bullish technology ETF activity fell about 50%, compared with a roughly 35% decline in bearish ETF activity, indicating reduced overall long exposure as well as greater hedging demand. The shift has not amounted to a broad bearish turn: Charles Schwab clients remained net buyers in July, with buyers outnumbering sellers by more than two-to-one, while the STAX activity index rose to 59.80 from 59.12 in June, its highest level since January 2022. Traders continued buying volatile technology names during pullbacks and rotated away from some established leaders, with Nvidia absent from July's top five STAX names. Schwab's Joe Mazzola said investors were selling puts on Nvidia, Micron Technology and SanDisk while buying lower-cost puts on the Invesco QQQ Trust to hedge broader technology exposure, alongside call buying aimed at a potential rally. Fidelity's Bryan Koplin said leveraged and inverse ETFs can be used either for hedging or directional bets, while warning that their risks and generally short-term nature require careful consideration.