Retail Investors Buy Tech Stocks Despite AI Fears

Retail investors have recently demonstrated a strong appetite for software and tech stocks, largely disregarding anxieties surrounding artificial intelligence advancements. This trend is highlighted by record net inflows into BlackRock's iShares Expanded Tech-Software Sector exchange-traded fund, reaching $176 million over a one-month period as of February 10, 2026. These flows have reportedly more than doubled previous peaks.

Last week, global markets experienced significant volatility. Fears resurfaced about the potential impact of rapidly evolving AI systems on the core businesses of established software companies, particularly after AI developer Anthropic released new features for its Claude Cowork agent.

This sentiment led to a sharp decline in the S&P 500 Software and Services index, which fell approximately 13% since late January, erasing nearly $1 trillion in market value by Thursday. The iShares Tech-Software ETF itself has lost nearly 20% of its value year-to-date.

Despite these market headwinds, retail investors strategically acquired stocks during the dip. Notably, Amazon.com experienced its largest single-day net retail buying since August 2025, surpassing even AI chip giant Nvidia. However, AI-related concerns have also begun affecting other market segments, with insurers in the U.S. and Europe experiencing downturns, linked to developments in ChatGPT's insurance applications.