Finimize survey shows optimism cooling as investors shift from hype to hedging, with more reducing risk and diversifying their exposure
- Bubble aware but staying invested: 61% say AI valuations look stretched, but 67% plan to maintain or increase exposure
- Cautious confidence: Over 60% expect markets to rise in the next 12 months, but more investors are holding cash and waiting for pullbacks
- Beyond Big Tech: 47% favour AI infrastructure plays such as data centres, energy and cloud, whilst 17% are actively reducing concentration in Magnificent Seven
03.12.25 – LONDON: Retail investors are displaying market maturity as they cool on the AI rally whilst remaining confident in its long-term potential, with 61% believing AI valuations are overstretched, but 67% planning to maintain or increase their exposure according to Finimize’s latest Modern Investor Pulse survey released today.
Navigating the AI bubble
This quarter’s findings from a survey of 2,160 global retail investors reveal a nuanced approach to what many see as an overheated sector. Rather than selling when valuations look stretched, one in three (33%) AI investors are hedging their optimism by adding defensive positions, such as gold, bonds or cash alongside tech holdings.
The diversification extends beyond defensive plays. Whilst Nvidia remains the most popular retail stock pick overall, AI investments are spreading beyond the usual suspects, with 47% favouring AI infrastructure such as energy, power, data centres and cloud computing. Significantly, 17% are actively reducing their concentration in the Magnificent Seven.
Carl Hazeley, CEO at Finimize, said: “Retail investors recognise that AI stocks are expensive, but they’re not abandoning ship. What’s changing is the mindset – people are holding their positions and managing risk more carefully. They’re thinking beyond the obvious plays that dominated 2025 headlines and looking at where the real value is in the AI value chain.”
Cautious confidence heading into 2026
The measured approach to AI reflects broader sentiment across asset classes, with investors remaining upbeat but clearly more selective than previous quarters.
Just over 60% expect markets to be higher over the next 12 months, showing that optimism has eased (down from 67%). This cooling is evident across the board – bitcoin confidence still exceeds stocks but is also softening.
A third of respondents are planning to take less risk over the next three months, with 30% building cash reserves or waiting for pullbacks before investing.
Meanwhile, investment activity is slowing, with 36% planning to invest more overall than in the previous quarter – down from 39% – as investors demonstrate increased selectivity about timings and opportunities.
Hazeley added: “What we’re seeing is retail investors are showing a more balanced approach at record-high markets. They’re building cash and slowing their investment activity, which takes discipline.
“They’re not abandoning their positions, but they’re not chasing every rally either. They’re waiting for the right opportunities and taking a strategic, long-term approach.”
About the Modern Investor Pulse
The Modern Investor Pulse is a quarterly survey capturing insights from Finimize’s global community of retail investors. For access to the full survey data, please reach out to our press team.
About Finimize
Finimize empowers retail investors with concise insights from world-class analysts. With over one million subscribers to its newsletter and mobile app, Finimize boasts one of the largest retail investor communities globally. Over 70,000 members attend its events annually. Finimize for Business supports over 350 financial institutions in engaging modern investors and creating content that drives engagement, revenue, and retention. Through its network of partners, Finimize content reaches over 40 million individual investors worldwide.
