Tech stocks remain popular despite recent volatility, says eToro

At the end of quarter one, nine of the 10 most held stocks are technology-based.

Despite recent market volatility, nine of the 10 most popular stocks on eToro’s trading platform at the end of the year’s first quarter are tech-based.

“Many investors are clearly ignoring short-term macro factors and are investing in tech because of the long-term opportunity,” said Ben Laidler, Global Markets Strategist at eToro.

Due to current market volatility, investors are hoping to buy tech stocks at a “low price point”. However, while the American NASDAQ has risen 12% since the middle of March, it is still difficult to call whether stock prices will rise further, Laidler explained.

“If the situation in Russia escalates, or central banks increase rates faster than expected, then this could have negative ramifications for all stocks, including those in the tech sector,” he said.

In particular, successive interest rate hikes affect tech-based stocks negatively. This is because the valuation of tech-based stocks is based on future earnings, which rising base rates restrict.

“UK investors are reacting to this, with the growth of Lloyds Bank open positions reflecting an adjustment to some less rate-sensitive investment choices,” said Laidler.

Of the 10 most popular stocks on the eToro platform worldwide, GameStop is the one non tech-based stock. This American brick-and-mortar gaming company is now the 10th most held stock, after falling from fourth position at the same time last year.

Elon Musk’s Tesla remains the most popular stock choice so far this year. At the same time last year, the Chinese automobile manufacturer Nio held top spot, but now sits in second position.

The most held stocks among eToro’s UK clients differed slightly to its worldwide version. Budget airline easyJet was the eighth most popular stock, while Rolls-Royce took seventh place.

While easyJet placed 10th on the chart this time last year, Rolls-Royce was 16th.

Other noticeable stocks outside the UK top 10 included streaming giants Netflix, which increased its number of new investors on the eToro platform by over half during the last quarter.