Young investors bet on tech stocks as AI rally draws generation of retail traders

Michelle Huynh, the 26-year-old eldest daughter of migrant parents in Australia, made a pledge in her teens that she would become a millionaire by the age of 30 – a promise she now describes as "somewhat silly" but one that has driven her to invest heavily in the stock market, where the technology-fuelled rally has edged her closer to that goal. Working in sales for a tech firm, Huynh has placed more than a third of her savings in tech stocks, and by mid-July that portion of her portfolio had jumped by 50 per cent this year – a gain of A$31,000 (£16,100; $21,666) – though those profits have since eased to about A$22,000 as the sector undergoes what she calls a "wild moment". Speaking of the sacrifices made by her non-English-speaking parents, she explained that investing had become a necessity in an era of shrinking purchasing power, and that she was prepared for volatility, viewing her tech holdings as a long-term bet.

The rise of tech stocks, spearheaded by companies riding the artificial intelligence boom, has attracted large numbers of ordinary investors, many in their twenties and early thirties, even as some analysts caution that the fervour surrounding AI may be overblown. Retail investors have been swept up in the excitement, fuelled by social media and concerted marketing efforts aimed at drawing non-professionals into the market, according to Glenn Tan from the advisory firm Providend. The tech-heavy Nasdaq in the United States has risen by about 10 per cent this year, while Japan's Nikkei 225 has advanced by more than 20 per cent, though many individual tech stocks have experienced substantial swings in both directions – volatility that is most apparent in South Korea, where Seoul's Kospi index, which includes tech heavyweights such as SK Hynix and Samsung Electronics, has surged by more than 50 per cent since January.

The rally has drawn an army of retail investors, known locally as "ants", which has in turn fuelled volatile trading, with South Korean investor U Chan Lee observing that even his mother – a stay-at-home parent with no previous interest in the stock market – had become engaged in equity investing. The Kospi, however, has seen dramatic moves, plunging from a record high of more than 9,000 points in June to around 6,500, with trading halted seven times this year under the circuit breaker mechanism designed to curb panic selling after falls of 8 per cent. These slides have raised concerns over investors who have borrowed money to buy stocks, prompting South Korean authorities to take action to curb the practice, while Lee, 30, sold many of his shares last year when the market surged, concerned it was becoming "too overheated", and has since adopted a strategy of buying on dips and selling after short-term gains.

The swings reflect the hazards of tech investing, analysts warn, as governments and corporations pour hundreds of billions of dollars into AI development, prompting sceptics to question whether the technology will prove profitable enough to justify such vast expenditure. Lale Akoner, an analyst at investment firm eToro, observed that people often place bets on "optimistic outcomes" or the "most visible winners" without grounding their decisions in a company's profitability, and cautioned that retail investors, who often view share drops as buying opportunities and treat sell-offs as a "test of conviction", must be aware of "how painful valuation resets can be". This cautionary note is echoed by the experiences of South Korean Jacqueline Choi, 28, who regrets not investing more ahead of the Kospi's rally and was forced to sell shares in Hyundai Motor and Samsung Electronics when she needed money, leaving her wondering why she had not committed all her savings to SK Hynix or Samsung stocks.

Choi's friends have invested thousands of dollars of their savings, and she now believes she should "really invest more, knowing that investing can earn you so much more than your everyday job" – a sentiment shared by Singaporean business student Shyan Lim, 24, who has placed about three-quarters of his savings into tech stocks, a conviction he has maintained despite "uneasy" days when his investments plunged by as much as 10 per cent. His bets have paid off handsomely: in October, he invested 23,000 Singapore dollars (£13,185; $17,845) in chipmakers Intel and Micron, and those shares are now worth about 100,000 Singapore dollars, leading him to feel "one step closer to retirement" and confident that, while still young, he can afford to take risks he would not countenance later in life. George Lee, a recent graduate with more than half his investments in tech, acknowledged the disadvantages that ordinary traders face but maintained that as long as a company's fundamentals remained unchanged, he was ready for the swings, having time to let his shares run.

Not everyone, however, is willing to bet so heavily on technology. Singaporean student Ayush Deb, 23, has allocated only about a third of his investments to the sector, recalling how his memory chip-focused holdings fell by more than 10 per cent in a single day in June, prompting discussion on investment forums about "who got burned". Having invested since his late teens, Deb said he had "ridden the highs and lows of tech stocks" but found the sector "quite hard to read", and sought to "cut out a lot of the noise" by focusing on informed decisions rather than market chatter. He admitted to a sense of FOMO – fear of missing out – when SpaceX listed in June and surged to $225, but noted that the shares had since dropped below their $135 listing price as analysts questioned the company's profitability, a cautionary tale that has reinforced his preference for studying a company's operations before committing funds.

In Sydney, Huynh, who creates her own finance-related social media content, observed that investing could be daunting for those entering the workforce because such skills were not widely taught in schools, and emphasised that staying abreast of news was an "underrated skill". She has recently turned to energy and metal stocks, believing they will benefit from heavy investment in chip manufacturing, and acknowledged that many young people were afraid of investing – "and validly so", she said, adding that "it can feel like gambling if you're not aware of what's going on". As the AI boom continues to reshape global markets, the experiences of these young investors – from Sydney to Seoul and Singapore – illustrate both the allure of technology stocks and the perils of chasing gains in a sector where volatility is the only certainty, even as sceptics continue to question whether the AI revolution will deliver on its promise.