Tech sector tops list of likely second-half investments for retail investors
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Tech will remain the favored play for retail investors for the remainder of the year — if they stick with what they said last month.
Driving the news: 23% of individual market participants will "most likely" increase their investments in tech during the last half of 2023, according to a survey of 1,000 U.S. retail investors conducted in early to mid-June by investing platform eToro.
- Their other top expected bets include AI (11%) and financial services (12%).
Zoom out: Their faith in the sector comes as tech's turnaround from last year has driven an "improbable 16% advance" in the broader S&P 500 in H1, while the Nasdaq clinched its best six-month start since 1983.
- If Big Tech earnings, which begin this week with Microsoft, Alphabet and Meta, show palatable spending on AI and a pickup in revenue growth in cloud businesses, shares of all three names could rally further.
The intrigue: "Individual investors never really bailed," as the market turned bearish, Callie Cox, investment analyst at eToro, tells Axios.
- Cox believes the strong job market in the U.S. has propped up confidence and created new investment opportunities, despite the toll that sustained levels of high inflation and rising interest rates took on pockets of the market and consumer demand.
- "If you have a job, if you're making a sufficient amount of money, and if you have money left over, you're more likely to invest."
What to watch: According to the survey, respondents feel most pessimistic about real estate (15%) and consumer discretionary stocks (14%).
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