Retail investors moved to buy software and technology stocks Monday, defying anxieties sparked by recent advances in artificial intelligence that threaten to disrupt the sector. The influx came after a week of heavy selling triggered by concerns over the competitive impact of rapidly evolving AI systems on established software companies.
Net inflows into the iShares Expanded Tech-Software Sector exchange-traded fund (ETF) reached a record $176 million for the one-month period ending Monday, according to data from Vanda Research. This represents more than double the peak observed in late 2024, signaling a significant shift in investor sentiment.
Last week’s market turbulence began after Anthropic, an AI developer, launched plug-ins for its Claude Cowork agent. These plug-ins intensified fears that AI could directly challenge the core business models of traditional software firms. The S&P 500 Software and Services index experienced a roughly 13 percent decline since late January, resulting in nearly $1 trillion in lost market value through Thursday.
The iShares Tech-Software ETF has shed nearly 20 percent of its value year-to-date. Despite this downturn, individual investors capitalized on the lower prices, particularly focusing on mega-cap stocks. Amazon.com saw its largest single-day net retail buying since August 2024 on Friday, surpassing even AI chip leader Nvidia, data from Vanda Research showed.
The reverberations of AI-related concerns extended beyond the technology sector this week, impacting insurers in both the United States and Europe. Analysts attributed these losses to developments surrounding insurance applications within ChatGPT, suggesting a broadening scope of AI’s potential influence.
Vanda, described as an independent research house specializing in tactical macro strategy, delivers analysis to institutional investors by combining investor positioning, expectation, and mass-market psychology, according to its LinkedIn profile. The firm’s data platforms, VandaXasset and VandaTrack, provide granular, daily-updated datasets on market positioning and flows.
The BlackRock Investment Institute (BII), the research arm of the world’s largest asset manager, focuses on macroeconomics, sustainable investing, geopolitics, and portfolio construction to guide BlackRock’s investment strategies and client decisions, as detailed on BlackRock’s corporate website. The BII leverages BlackRock’s extensive expertise to generate proprietary research.
The impact of AI on the insurance sector remains unclear, with no immediate statements released by major insurance companies regarding specific adjustments to their strategies. The long-term implications of AI-powered applications within ChatGPT for the insurance industry are currently under evaluation.
