Retail inflows into software stocks hit record despite AI-disruption worries

Feb 10 (Reuters) – Retail investors snapped up software and tech stocks following last week’s heavy selloff, largely brushing aside worries that advances in artificial-intelligence models could upend parts of the industry.

Net inflows into BlackRock’s iShares Expanded Tech-Software Sector exchange-traded fund hit a record $176 million on a one-month rolling period as of Monday’s close, according to data compiled by Vanda Research. The analytics firm said the flows were more than double the peak seen in late 2024.

Global markets were rattled last week after AI developer Anthropic’s launch of plug-ins for its Claude Cowork agent reignited fears that rapidly progressing AI systems could encroach on the core businesses of traditional software companies.

The S&P 500 Software and Services index has fallen about 13% since late January and wiped out close to $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 accumulate mega-cap stocks. Amazon.com witnessed its largest single-day net retail buying since August 2024 on Friday, trumping AI chip giant Nvidia, according to Vanda.

AI jitters, however, rippled into new corners of the market this week, dragging down insurers in the U.S. and Europe. Analysts linked the losses to developments around insurance-related apps within ChatGPT.

(Reporting by Johann M Cherian in Bengaluru; Editing by Shilpi Majumdar)