As market dynamics evolve, investors are increasingly favouring targeted AI shares over passive funds, balancing potential gains with heightened risks amid rapid technological change and growing market disparities.
Investors who once built portfolios around broad market funds are increasingly putting their money into a smaller set of high-conviction shares, with artificial intelligence at the centre of the trade.
HedgeCo.Net reported that a SoFi survey found about 31% of alternative-leaning investors were cutting back on passive index products and redirecting capital into individual equities they expect to outperform. The shift comes after years in which low-cost ETFs dominated flows, but it now coincides with heavier market concentration, faster technological change and wider gaps between winners and losers.
That backdrop has made stock picking look more attractive again, especially in AI-linked names. The article argues that semiconductors, cloud infrastructure providers and other parts of the AI supply chain offer investors more scope to find mispriced opportunities than a broad index does. OpenAI’s decision to make its shares accessible through several ARK Invest ETFs, while also selling stock in a private placement, underlines how intense demand has become for direct exposure to the theme. Axios reported that the latest round valued OpenAI at $852 billion. (hedgeco.net)
The move toward individual stocks does not mean ETFs have lost their appeal altogether. In fact, some recent evidence points the other way in the shorter term. Axios reported in July 2025 that J.P. Morgan data showed retail investors were buying ETFs rather than individual shares, with $5.2 billion in equity purchases in a week and $4.8 billion of that flowing into ETFs. AP later reported that retail trading activity reached $5.4 trillion in 2025, almost 47% more than the year before, and that individual investors outperformed SPY and QQQ last year. (axios.com)
That helps explain why many investors are settling on a hybrid approach: keeping a core allocation in diversified funds while adding targeted bets around themes such as AI, digital assets or energy transition. The attraction is obvious, but so is the risk. Concentrated positions can outperform dramatically when the thesis is right, yet they can also magnify losses when enthusiasm outruns fundamentals. As the AI cycle develops, the market appears to be rewarding those willing to do more homework, while still punishing anyone who confuses momentum for certainty.
- https://hedgeco.net/news/04/2026/the-individual-stock-alpha-resurgence-why-investors-are-moving-past-etfs-in-the-age-of-ai.html – Please view link – unable to able to access data
- https://www.13radar.com/insight/blackrock-sees-investors-shift-from-big-tech-to-ai – BlackRock reports that investors are moving away from broad technology funds and focusing on AI-specific exchange-traded funds (ETFs) and blockchain-related investments. This shift reflects a more targeted approach to disruptive technologies, with companies like Nvidia, Microsoft, and Ethereum attracting significant attention. The trend indicates a growing preference for investments directly linked to AI advancements and blockchain developments, moving beyond traditional tech sector allocations.
- https://www.axios.com/2026/03/31/openai-ai-stock-investors-ipo – OpenAI has announced plans to allow individual investors access to its stock ahead of its anticipated IPO. This will be facilitated through the inclusion of OpenAI shares in several ETFs managed by ARK Invest. The move aims to democratise investment opportunities in artificial general intelligence (AGI), aligning with OpenAI’s mission to ensure AGI benefits humanity. The funding round raised $3 billion, bringing the total round value to $122 billion and pushing its post-money valuation to $852 billion.
- https://www.fool.com/investing/2024/04/12/should-investors-buy-artificial-intelligence-tech/ – The article discusses whether investors should opt for artificial intelligence and technology ETFs or individual AI stocks. It highlights that the Global X Artificial Intelligence & Technology ETF (AIQ) owns over 80 stocks, providing diversified exposure to the AI sector. The piece also notes that while ETFs offer diversification, some investors may prefer individual stocks for potential higher returns, though this comes with increased risk and volatility.
- https://www.fool.com/investing/2026/02/28/struggling-to-pick-ai-stocks-youre-not-alone–try-this-etf-instead/ – This article addresses the challenges investors face in selecting individual AI stocks and suggests the iShares Future AI and Tech ETF as an alternative. The ETF provides exposure to a diversified portfolio of AI-related companies, mitigating the risks associated with picking individual winners in the rapidly evolving AI sector. It underscores the complexities of the AI industry and the benefits of a diversified investment approach.
- https://www.axios.com/2025/07/18/nvidia-tesla-stock-market-dip-buying – Retail investors are shifting away from aggressively buying individual stock dips, a trend that was prominent in April, instead favouring ETFs for their investments, as per new data reported by J.P. Morgan. This evolution in behaviour marks a move toward diversification and lower risk strategies. Last week alone, retail investors directed $5.2 billion into total equities, predominantly through ETFs. This contrasts with institutional investors, who sold $22 billion in cash equities despite markets reaching new highs.
- https://apnews.com/article/6e5a383001aea67a180fa07896022e93 – In recent years, individual or retail investors have become an increasingly influential force on Wall Street, shedding the outdated stereotype of being ‘dumb money.’ Powered by mobile apps, commission-free trading, and access to real-time data and online communities, these investors outperformed major index funds like SPY and QQQ in 2025. Retail investors accounted for $5.4 trillion in trading activity last year—a 47% jump from 2024—surpassing any year since 2014.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article was published on April 29, 2026, making it current. The information aligns with recent developments, such as OpenAI’s valuation at $852 billion after a $122 billion funding round completed on March 31, 2026. ([bloomberg.com](https://www.bloomberg.com/news/articles/2026-03-31/openai-valued-at-852-billion-after-completing-122-billion-round?sref=1kJVNqnU&srnd=homepage-americas&utm_source=openai)) However, the specific SoFi survey data mentioned lacks direct verification from independent sources, raising concerns about its freshness and accuracy.
Quotes check
Score:
5
Notes:
The article references a SoFi survey indicating that approximately 31% of alternative-leaning investors are reducing exposure to passive index products in favour of individual equities. However, the exact wording of the survey results is not provided, and no direct quotes are included. Without access to the original survey or its methodology, the accuracy and context of these findings cannot be independently verified.
Source reliability
Score:
6
Notes:
The article originates from HedgeCo.Net, a niche financial news platform. While it provides detailed analysis, the lack of broader recognition and independent verification of its content raises questions about its reliability. The absence of citations from major news organisations or well-known financial analysts further diminishes the source’s credibility.
Plausibility check
Score:
7
Notes:
The trend of investors shifting from passive index funds to individual equities, particularly in the AI sector, is plausible given the rapid advancements in AI and the potential for higher returns. However, the specific claim that 31% of alternative-leaning investors are making this shift is unverified and may be an overestimate. The article also mentions OpenAI’s valuation at $852 billion, which is consistent with recent reports. ([bloomberg.com](https://www.bloomberg.com/news/articles/2026-03-31/openai-valued-at-852-billion-after-completing-122-billion-round?sref=1kJVNqnU&srnd=homepage-americas&utm_source=openai))
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents a timely analysis of investment trends in the AI sector, referencing recent developments such as OpenAI’s valuation at $852 billion. However, the reliance on unverified survey data from SoFi and the lack of independent verification from reputable sources significantly undermine its credibility. The source’s niche status and absence of citations from major news organisations further diminish its reliability. Given these concerns, the article fails to meet the necessary standards for publication.