Retail investors now wield considerable power in the stock market.
And after years of exerting more influence over stock movements, one analyst contends his standing in the financial world has gone up a notch.
“Retail investors used to be at the little kids’ table at Thanksgiving and give them a little cookie,” Wedbush Securities CEO Dan Ives said during Yahoo Finance’s Invest event on Thursday.
“Now they’re at the adult table, front and center.”
In major companies like Robinhood (HOOD), Palantir (PLTR) and Tesla (TSLA), retail investors tend to be very informed, the prominent Tesla bull said, and he has seen retail investors in many stocks get far ahead of the institutional investment sector.
“If you go back to the early days (of Palantir), there were the early believers in retail,” Ives said. “(Institutional investors) laughed when the stock was in its teens, and then cry when it turns 100 and shout from the mountaintops when it hits 200.”
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Retail investors showed their strength for the first time since the 2000 tech bubble during the post-pandemic rally, which culminated in the short squeeze of GameStop (GME) in 2021. That move sent the stock price up more than 2,500%, crushing institutional investors with short positions or bets on the stock’s decline, and spawned a major Hollywood movie about the incident.
Hedge fund Melvin Capital lost billions of dollars on a short position in GameStop, contributing to the company’s closure and 2022 return on equity.
The result is a market that has become increasingly deferential toward retail trading, hedge fund manager Eric Jackson told Yahoo Finance. Jackson has been the driving force behind much of the energy in the 2025 rally in retail technology company Opendoor Technologies (OPEN), which is up more than 470% for the year.
“The perception is that they are stupid, ‘dumb money,'” Jackson said. “When (institutional investors) see certain stocks go up and go up 100%, 200%, they immediately don’t trust that… However, retail doesn’t miss out.”
Jackson highlighted Palantir CEO Alex Karp’s willingness to engage with retail investors via video earnings calls, answering retail investors’ questions during the calls, “treating them with the same importance as sell-side analysts.”
Many of the best conversations Ives has are with retail investors, the Tesla bull told Yahoo Finance. Ives said those investors have developed full-fledged theories and asked questions that “only the most sophisticated institutional investors would have asked.”