UAE investors snap up AI stocks after price drop

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• CrowdStrike caused IT crash
• Big Tech still in favour
• Nvidia stock up more than 80%

UAE investors poured money into artificial intelligence stocks during the third quarter, capitalising on underperforming shares, data from retail trading platform eToro indicates.

Blockchain and AI dominated the investments made during the three-month period, as buyers seemingly looked for long-term potential, despite short-term challenges. 

The value of CrowdStrike Holdings plummeted more than 40 percent in July after it caused one of the biggest IT crashes in recent years, but eToro said CrowdStrike recorded the largest increase in UAE holders (up 131 percent) during the third quarter.

Nvidia’s stock rose more than 80 percent in the past six months, while Intel’s stock dove 28 percent in August, but both recorded an increase in holdings in the UAE. 

Snowflake, Micron Technology, Advanced Micro Devices and Taiwan Semiconductor Manufacturing also gained in holders, which eToro said was down to investors backing the future growth of AI companies.

“UAE investors are increasingly forward-looking, focusing on industries that are expected to define the future of technology,” said Jason Hughes, senior executive officer at eToro,

UAE investors continued to increase their exposure to blockchain stocks, eToro said. 

With an 82 percent increase, Marathon Digital Holdings, a tech company that mines digital assets with a focus on bitcoin, had the second-largest growth during the third quarter, eToro said. 

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“The rise in interest around blockchain stocks also highlights growing awareness of its transformative capabilities, particularly in decentralised finance and other innovative sectors,” Hughes said.  

Big Tech continues to dominate UAE investors' portfolios as they seek “stability and long-term growth potential, making them reliable choices even as interest in emerging sectors like AI and blockchain grows”, Hughes said.

Tesla, Amazon, Apple, Microsoft and Google parent company Alphabet were among the most-held assets at the end of the third quarter.

Biggest fallers

Gilat Satellite Networks (down 73 percent), an Israeli provider of satellite-based broadband communications and Medical Properties Trust, a US real estate investment trust (a 72 percent drop) had the largest falls in interest from UAE investors. 

eToro said Medical Properties Trust, along with video game developer Roblox, which fell 11 percent, were “navigating regulatory and operational challenges” in the third quarter. 

Stocks such as Shopify and PayPal witnessed declining interest in the third quarter, as the pandemic-led boom in ecommerce and online payments continues to slow down, eToro added. 

“Both the top risers and fallers suggest that UAE retail investors keep a close eye on macroeconomic and corporate developments to identify opportunities and are agile in their approach to shaping their portfolios,” said Hughes.