British retail investors are increasingly turning to the ‘picks and shovels’ unlocking the growth of Artificial Intelligence, according to the latest quarterly stocks data from CFD trading and investing platform eToro. The data comes from the eToro platform on the final day of Q1 2024 with the final day of Q4 2023. The data refers to funded accounts of eToro UK-based users.
eToro looked at which companies saw the biggest proportionate change in holders, quarter-on-quarter, while also looking at the 10 most held stocks on the platform by UK users.
The data reveals that eToro’s UK users are taking an interest in the ‘picks and shovels’ of the AI gold rush, backing several semiconductor firms which produce chips that are able to store and process massive datasets that enable AI.
Cambridge-based ARM Holdings [NASDAQ:ARM] saw a 54% increase in UK users holding the stock, while Broadcom Inc NASDAQ:AVGO (53%), Taiwan Semiconductor Manufacturing [TPE: 2330] (37%), Micron Technology NASDAQ:MU (27%) and Advanced Micro Devices NASDAQ:AMD (26%) also feature in the top 20 quarterly risers. AI juggernaut Nvidia NASDAQ:NVDA also sustained its popularity with a 41% quarter-on-quarter increase in UK-based holders.
Which stocks saw the biggest increase on the eToro platform (QoQ increase)?
- Palo Alto Networks +126%
- MicroStrategy +90%
- Novo-Nordisk A/S SPONS ADR +83%
- Novo Nordisk B +83%
- ARM Holdings +54%
While the rise in ‘picks and shovels’ exposure is striking, investors are also focusing on companies successfully integrating AI (and helping other companies to integrate AI) into their operations, such as cybersecurity firm Palo Alto Networks (126%) which topped the leaderboard. Ranking second was software firm MicroStrategy Incorporated (90%), whose bitcoin-proxy credentials helped it ride Bitcoin’s 2024 rally.
Commenting on the data, eToro Global Market Strategist Ben Laidler said: “’During a gold rush, sell shovels’, as the saying goes. Investors are clearly seeing value in semiconductors, a key enabler of AI, and looking for growth stocks in this area with slightly more modest valuations than the de facto leader Nvidia. But it’s not just the ‘shovels’ – companies that are effectively integrating AI are attracting swathes of new investors, who are being rewarded by the technology’s move from hype to revenues and profits.”
- Share Tip: Chinese AI specialist shares flying again after 1H loss
- The transformative potential of biotechnology and AI in healthcare
- Free investor’s guide to Artificial Intelligence and Robotics
What are investors selling?
At the other end of the spectrum, eToro’s UK users cooled on previously popular American value stocks. The most significant QoQ fall was Mattel (-22%), suggesting that its Barbie movie shine is beginning to wear off. Mattel was followed by several other large American value stocks, including Wells Fargo (-17%), Atlanta Braves Holdings (-17%), Target Corp (-15%), Fedex Corporation (-14%) and Bank of America Corp (-13%).
Laidler added: “The stardust around Barbie-maker Mattel has started to fade. The firm enjoyed a sizeable share price boost with the huge commercial success of the film last year, but this momentum hasn’t continued and investors are responding.”
“Investors are still very much in ‘risk on’ mode, looking to back what they see as the winners of tomorrow – no doubt spurred by the spectacular performance of many AI and tech stocks over the past 12 months,” said Laidler.
