According to the information obtained by the Intelligence Finance app, despite the Nikkei Stock Average index returning to a historical high last Thursday, a large increase in margin buying by individual traders may pose a challenge to semiconductor manufacturers, electrical utilities, and some growth stocks.

Although the data released last week showed a slight decrease in outstanding margin buying positions, the figure is still close to the highest level in 18 years. This highly leveraged trading behavior may affect the rise of the Nikkei 225 Stock Average index, which has a narrow coverage area and mainly includes large technology companies and growth stocks in Japan.

Chip manufacturers have always been the focus of the artificial intelligence-driven buying craze, but this craze may be impacted.$Tokyo Electron (8035.JP)$As Japan's largest chip manufacturing equipment supplier, the margin buying volume has surged by JPY 4.7 billion (approximately USD 44.7 million) since the end of last year, the most significant increase among the components of the TOPIX 500 index.

The performance of chip stocks such as Tokyo Electron has started to weaken since reaching a peak in March and April, which has also caused the Nikkei index to underperform since then compared to the TOPIX index.

Jun Kitazawa, Investment Information Deputy General Manager at Mitsubishi UFJ Asset Management Co., Ltd. stated that: "Chip-related stocks' prices have been limited. Liquidation of the margin position may bring further pressure to these stocks."

For electrical utilities, the impact of margin positions may be even more significant, as their stocks briefly rose due to market expectation of increased demand for electricity from chip manufacturing and data centers related to artificial intelligence.

Since the beginning of this year, the stock price has surged by 171.5%, and this week it has once again topped the market cap list of US stocks. Although the stock experienced a significant pullback on Thursday, Bank of America believes that it still represents an attractive investment opportunity. Any dip in Nvidia's stock should be viewed as a chance to buy more.$Tokyo Electric Power (9501.JP)$TEPCO's margin buying position ranks eighth in the TOPIX 500 index.$Hokkaido Electric Power (9509.JP)$The long position margin of Hokkaido Electric Power surged in April and now accounts for 1.8% of its total market value.

Shift Inc., an IT services stock favored by some investors, has continued to decline in its stock price, which may force investors to sell at stop loss levels with the significant increase of margin bids.

Other companies favored by margin investors include chip-related stocks, such as$Lasertec (6920.JP)$, $Disco (6146.JP)$, $Screen Holdings (7735.JP)$and $Mitsubishi Heavy Industries (7011.JP)$ and $Hitachi (6501.JP)$.

Editor/ping