The 'FAAMG' trade is dead but Apple's appeal stays alive with retail buyers and a $90 billion buyback arsenal, research firm says

• Apple's following among retail investors and its $90 billion share buyback program is aiding the stock's gains, Vanda Research says.
• One-third of the money retail investors use to buy Nasdaq stocks has been directed into Apple shares.

Apple's stock has "defied all laws of gravity" this month, remaining on its path toward a $3 trillion market valuation thanks to its power base of retail investors and a multi-billion repurchase program, according to Vanda Research.

Amateur investors have poured nearly $1.1 billion into Apple shares since the end of November, meaning one-third of all retail money put into constituents of the popular Invesco QQQ Trust ETF is directed to Apple, the firm said in a note Wednesday.

Meanwhile, the other FAMG stocks excluding APPL have only received 11%, said Vanda. FAMG refers to tech giants Facebook and Amazon and Microsoft and Google's parent Alphabet.

"What seems clear is that FAAMG is not a thing anymore, at least not from a retail perspective. The group received very large flows at the start of the pandemic but there has been a changing of the guards since then," wrote Vanda analyst Giacomo Pierantoni and senior strategist Ben Onatibia.

Apple's "cult following" by retail buyers combined with the company's $90 billion stock buyback program has helped the price march higher, up by more than 5% in December through Tuesday's session. The stock has gained nearly 36% this year, outpacing the S&P 500's strong 25% advance.

Tesla and AMD and Nvidia have also caught the attention of retail buyers as they directed about one-third of their money collectively into those Nasdaq stocks since the end of last month. Meanwhile, FAMG stocks (excluding APPL) have only received 11%, said Vanda. FAMG refers to tech giants Facebook and Amazon and Microsoft and Google's parent Alphabet.

The VandaTrack tool monitors retail-investing activity in 9,000 individual stocks and ETFs in the US.

"APPL remains well-loved but the rest of the group has been no match to TSLA, AMD and NVDA's appeal among retail investors. FAAMG is dead, long live the TAAN," they said.

Vanda added this has important implications for investors.

"During risk-on rallies, retail demand for TAAN stocks makes them a much higher beta play relative to the FAAMG. But when risk sentiment turns south, stocks with high retail participation usually underperform, unless your treasury desk has $90 billion to spare," it said.

Examples of that dynamic are SPACs and meme stocks, said Vanda. Interest in AMC and GME has waned over time and large sell-offs "don't find that many enthusiastic buyers," it said. "SPACs were also a vulnerable space given the large inflows that went into EV stocks like Lucid during the Q4 rally."