How are UAE retail investors embracing the AI boom to shape their investments?

By Puja Sharma

UAE retail investors embrace the AI boom, using AI tools to shape their investments

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71% of retail investors in the UAE hold stocks in companies engaged with AI

• Over 90% are using AI tools to select or adjust their investments or are open to trying.
• AI stocks, the most popular among eToro UAE-based users in the first quarter.

Almost three in four (71%) retail investors in the UAE hold stocks in companies engaged in artificial intelligence (AI) development, according to a survey from trading and investing platform eToro. This highlights a broad recognition of AI technology’s potential as a driver of innovation and competitive advantage.

UAE retail investors’ engagement with AI extends beyond the stocks in their portfolios. When asked about their use or plans to use AI tools such as ChatGPT to select or adjust their investments, 39% reported they are already using such technologies. Millennials are at the forefront of this trend, with 40% of 25-44 year-olds already utilising AI technologies. They are closely followed by Baby Boomers and Gen X investors, at 39% and 38% respectively. For Gen Z investors, the proportion drops to 33%.

Highlighting the central role AI could play in future investment strategies, alongside those already using AI tools, a further 52% of respondents also said they are open to adopting the technology to guide or modify their portfolio in the future. This trend defies generational stereotypes, with the older cohorts of investors leading the charge. 60% of Baby Boomers showed a keen interest in integrating AI into their investment planning, followed by Generation X (58%). Younger generations show interest at slightly lower rates with 55% of Gen Z and 50% of Millennials saying to be open to trying AI tools.

“Microsoft’s recent $1.5 billion investment in Abu Dhabi’s G42 is a significant endorsement of the UAE’s potential as a global AI hub, which is reflected in the survey results showing widespread AI adoption by local investors and consumers, said Ben Laidler, Global Markets Strategist at trading and investing platform eToro.  

“AI stocks were the performance juggernauts of 2023, leading the tech sector revival and propelling the S&P 500 into bull market territory. AI trends helped make NVIDIA and Meta the best S&P 500 stock performers of last year, with their share prices tripling. Whilst we’re unlikely to see a repeat performance in 2024, the benefits of AI’s rapid adoption are broadening across the stock market and economy as it rapidly moves from hype to reality.”

AI stocks dominate UAE investment choices

eToro also looked at which companies saw the most significant proportionate change in UAE-based holders on its platform quarter-on-quarter and found that AI stocks were the most popular theme in the first three months of the year.

In the first quarter of 2024, NVIDIA, Taiwan Semiconductor, Advanced Micro Devices, Adobe, Intel and Microsoft all featured as  ‘top risers’ among  UAE investors.

Ben Laidler added, “The increased investment in these companies is indicative of investor confidence in the AI sector’s continued growth and ability to offer substantial returns in the long term. This also aligns with the UAE’s efforts to position itself as a hub for technology and innovation.”