UK retail investors moderate expectations for AI and Magnificent 7

UK retail investors moderate expectations for AI and Magnificent 7, eToro’s Retail Investor Beat finds

• 41% of UK retail investors expect AI stocks to rise in 2026, down from 56% in Q1 2025
• Confidence in “Magnificent 7” outperformance dropped to 36%, down from 42% in the previous quarter and 47% at its peak in Q2 2025
• A third (34%) of investors plan to increase the amount they invest, even as global recession becomes the top external risk (24%)

UK retail investors are becoming more measured in their expectations for AI-related stocks and the “Mag 7”, according to the latest quarterly Retail Investor Beat from trading and investing platform eToro.

The survey of 1,000 UK retail investors shows that expectations for AI-related stock gains have fallen to 41% in Q1 2026, down from 50% in Q4 2025, and 56% in Q1 2025. Meanwhile, confidence in the outperformance of the “Magnificent 7” in 2026 has also declined to 36%, down from 42% in Q4 2025, and 47% at its peak in Q2 last year.

At the same time, uncertainty is on the rise, with 15% of investors now citing that they are unsure about the outlook for the “Mag 7”. This is up from 10% in Q4 2025, signalling a shift away from the strong conviction that has characterised recent market momentum.

The survey was conducted between 12–27 February 2026, prior to the recent escalation in the Middle East. The findings therefore reflect investor sentiment before the outbreak of the Iran conflict.

Lale Akoner, Global Market Strategist at eToro says: “What we are observing is not a retrenchment from AI or large-cap technology, but a normalisation of expectations following an extended period of outsized returns. These companies have been central to index performance, but retail investors are increasingly recognising that forward returns are unlikely to mirror the recent past. The shift is less about sentiment turning negative, and more about a recalibration of profit expectations and valuation sensitivity.”

UK investors remain active but are becoming more cautious

Even as sentiment towards AI and tech cools, UK retail investors are not stepping away from markets, with a third (34%) planning to increase their investment contributions. However, there are clear signs that investors are becoming more cautious in how they position their portfolios.

The proportion of investors holding cash in their portfolios has risen to 82% compared to 81% in Q4 2025, while there are early signs of rotation toward more traditional sectors, with 28% of investors holding commodities, and energy exposure increasing to 41%, up from 38% in the previous quarter.

Lale Akoner added: “Retail investors remain invested in markets, but their behaviour is becoming more selective. Capital is still being deployed, yet with greater selectivity and an increased emphasis on portfolio resilience. The incremental move towards cash, commodities, and energy suggests a more balanced approach, one that reflects participation in growth opportunities, while acknowledging a more complex and uncertain macro backdrop.”

Recession fears rise as confidence in the economy weakens

This evolving behaviour is set against a backdrop of increasing macroeconomic concern. A potential global recession is now cited as the biggest external risk (24%), having risen from a secondary concern for investors over the past year.

However, this sentiment is not reflected at an individual level. Nearly 80% of UK retail investors remain confident in their own investments, even as confidence in the UK economy has dropped to 34% compared to 37% a year ago.

Lale Akoner adds: “The divergence between confidence in personal portfolios and scepticism towards the broader economy is notable. It points to a cohort of investors who remain invested and constructive on their own positioning, but are increasingly mindful of external risks. This typically manifests in more diversified portfolios, lower concentration risk, and a gradual shift towards defensive exposures.”

About this report
The latest Retail Investor Beat was based on a survey of 11,000 retail investors across 13 countries and 3 continents. The following countries had 1,000 respondents: UK, US, Germany, France, Australia, Singapore, Italy and Spain. The following countries had 600 respondents: Netherlands, Denmark, Poland, Romania, and the Czech Republic.

The survey was conducted from February 12 – 27 February 2026 and carried out by research company Opinium. Retail investors were defined as self-directed or advised and had to hold at least one investment product including shares, bonds, funds, investment ISAs or equivalent. They did not need to be eToro users.

The figures and results presented in this survey are based on the responses of participants at the time the survey was conducted. They reflect responders’ opinions, views and perceptions and should not be interpreted as investment advice or a guarantee of future performance. Percentages and results may not be representative of the broader population and are subject to change as market conditions and sentiment evolve.