Heavy investment in AI is enhancing Big Tech’s appeal among retail investors, even as expectations for AI-related stocks become more measured according to the latest Retail Investor Beat from online broker etoro.

Research conducted by the trading and investing platform suggests focus is shifting from ‘promise to proof’, with retail investors placing greater emphasis on whether AI spending can translate into results.

The quarterly research, which surveyed 11,000 retail investors across 13 countries, found that 38% say the significant sums being invested in AI by the so-called Magnificent 7 (Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia and Tesla) make them more likely to invest in the companies. Just 15% say the spending makes them less likely to invest, i.e. around 2.5x as many are attracted as deterred.

Enthusiasm is strongest among younger investors. Almost half of Gen Z (49%) and millennials (47%) say the scale of AI investment makes them more likely to invest in the Magnificent 7, compared with 37% of Gen X and 24% of baby boomers.

Commenting on the data, etoro’s Global Market Strategist Lale Akoner said:

“Retail investors see Big Tech’s AI spending as a vote of confidence in the technology’s long-term potential. A level of commitment that is strengthening, not weakening, its appeal. The scale of investment appears to reinforce their willingness to back the companies building the infrastructure, models and products that will shape the next phase of AI adoption.”

Even as expectations for AI stocks more broadly have become more measured, 43% of retail investors expect the Magnificent 7 to outperform the broader market in 2026, compared with just 10% who expect the group to underperform. The proportion expecting outperformance is unchanged from last quarter and up from 40% in Q1 2026.

This is also reflected in broader sector preferences, with technology the top choice for increased investment at 20%, up from 18% a year ago and ahead of financial services (12%) and energy (10%).

Yet this bullishness comes as expectations for AI-related stocks more broadly are cooling. 44% of retail investors expect AI stocks to rise in 2026, down sharply from 55% a year ago, while the proportion expecting them to decline has risen from 11% to 18%.

Lale Akoner commented:

“After several years of AI enthusiasm, investor conviction is becoming more concentrated. They no longer see AI as a rising tide, instead focusing on which companies can turn huge AI spending into adoption, revenues and, ultimately, return on investment. The winners will be those that can show AI is not just a growth story, but a profitable one.”

This more selective approach to AI stocks does not mean retail investors are stepping away from the technology. More than half (56%) already use or are open to using AI tools such as ChatGPT or AI agents to pick or alter investments. This figure is slightly below last year’s 58% but remains well above the 45 per cent recorded when the question was first asked in Q2 2023.

Among this group, 41% say AI can save them time on research, while 40% believe it is the future of investing. More than a quarter (27%) think AI could make better investment decisions than they can themselves.

Lale Akoner added:

“Retail investors see AI as a practical tool to save time, process information and test their thinking, not a replacement for human judgement. That is the direction of travel for AI in investing: more scrutiny of where value will be created, alongside greater willingness to use the technology as part of the investment process.”