Retail inflows into software stocks hit a record despite concerns about AI disruption

Retail investors bought software and technology stocks after last week’s heavy sell-off, largely brushing aside concerns that advances in artificial intelligence models could upend parts of the sector.Net inflows into BlackRock’s iShares Expanded Tech-Software Sector exchange-traded fund reached a record $176 million over a rolling one-month period as of Monday’s close, according to data compiled by Vanda Research. The analytics firm said flows were more than double the late 2024 peak.

Global markets were in turmoil last week after AI developer Anthropic launched plug-ins for its Claude Cowork agent, rekindling fears that rapidly advancing AI systems could encroach on the core businesses of traditional software companies.

The S&P 500 Software and Services index is down about 13% since late January, wiping out nearly $1 trillion in market value over the week through Thursday.

The iShares Tech-Software ETF has lost nearly 20% of its value so far this year.

Retail investors took advantage of the dip to build mega-cap stocks. Amazon.com on Friday witnessed its largest single-day net retail purchase since August 2024, surpassing AI chip giant Nvidia, Vanda said.

However, AI jitters came to new corners of the market this week, dragging down insurers in the US and Europe. Analysts linked the losses to developments in insurance-related apps within ChatGPT.