Retail sticking with crypto, tech, and AI

CRYPTO: Retail investors are sticking with the big tech sector and crypto investments that have served them so well in 2023 and this year. This is according to our latest global survey of 10,000 DIY investors in 13 countries. Crypto is now the second most popular asset class after stocks for DIY investors. With a third (34%) of retail investors owning crypto and making it a uniquely retail-dominated asset class. It is easily the best-performing asset of 2024 so far, driven by a fundamental supply-demand squeeze. With the strong demand from the new spot Bitcoin ETFs. And 25 days until the four-yearly Bitcoin halving event that will further act to slow supply growth.

TECH: Tech sector stocks are the most popular with retail investors, and they are sticking with them. It is the second most broadly held (by 44%) sector, and the most favoured one for new investments (by 16%) in our global survey. The top-10 most held on the eToro platform are also all tech. Much of this interest is on the ‘Magnificent 7’ largest stocks. They benefit from a rare combination of 1) a recent overall 60% earnings surge, alongside 2) fortress balance sheets and high profit margins. DIY investors are drawn more by this strong growth (33% say it’s the main attraction) and AI exposure (33%). Fewer by the defensive qualities (13%).

AI GAINS: Artificial Intelligence (AI) themes are already very popular with retail investors. And set to get more so, according to our survey. This could potentially drive even further AI price outperformance. With AI stocks such as Nvidia (NASDAQ:NVDA), ARM (ARM) and Super Micro (SMCI) already among the best performers so far this year. The proportion of global retail investors holding AI-related stocks rose from 27% to 31% in the past three months. Led by younger investors, Poland, Germany, and US. Whilst a much larger 35% plan to invest in AI stocks in the future. Led by Romania, Spain, Italy and peak-earning investors aged 45-54.