Retail investors have aggressively bought software and technology stocks in the wake of last week’s sharp market sell-off, largely setting aside concerns that rapid advances in artificial intelligence could threaten the core businesses of established software companies.
Data compiled by Vanda Research shows that net inflows into BlackRock’s iShares Expanded Tech-Software Sector exchange-traded fund reached an all-time high of $176 million on a one-month rolling basis as of Monday’s close. According to the analytics firm, that figure is more than double the previous peak recorded in late 2024.
Global markets were shaken last week after artificial intelligence company Anthropic launched new plug-ins for its Claude Cowork agent. The release reignited investor anxiety that fast-evolving AI systems could increasingly encroach on the traditional business models of software firms.
The pressure has already been reflected in market performance. The S&P 500 Software and Services Index has dropped roughly 13% since late January, erasing close to $1 trillion in market value in the week through Thursday.
The pullback has been even steeper for software-focused funds. The iShares Tech-Software ETF has declined nearly 20% so far this year, underscoring the scale of the recent sell-off.
Rather than retreating, retail traders used the downturn as an opportunity to add to positions in large-capitalisation technology stocks. Amazon recorded its biggest single-day net retail buying since August 2024 on Friday, overtaking AI chipmaker Nvidia, according to Vanda Research.
While software stocks attracted fresh inflows, concerns around AI continued to ripple across other areas of the market. Shares of U.S. insurers and their European counterparts came under pressure this week, with losses in both regions linked by analysts to developments involving insurance-related applications within ChatGPT.
The renewed volatility highlights how advances in artificial intelligence are increasingly shaping investor behaviour across multiple sectors, even as retail traders show growing willingness to buy into market weakness rather than retreat from it.
