UAE investors double down on AI, hold crypto amid Gulf conflict

eToro user data for the first quarter show investors in the United Arab Emirates increased holdings in AI and enterprise software stocks after price drops, with purchases concentrated in ServiceNow (+125%), Super Micro Computer (+65%), Adobe (+54%) and Oracle (+38%). Strategy Inc. remained among the most-held names, ranked eighth in holdings.

Market analyst Josh Gilbert at eToro characterized Q1 activity as more selective, with buying focused on companies tied to AI infrastructure and enterprise software rather than broad portfolio de-risking. The data indicate investors added exposure to these themes during the quarter.

The buying occurred amid regional security tensions that have affected logistics and digital infrastructure in the Gulf. A Deutsche Bank report cited incidents including reported strikes on cloud-provider data centers in the UAE and Bahrain and threats to a planned 1GW data campus in Abu Dhabi.

Deutsche Bank stated those developments are likely to increase demand for AI-related services, cybersecurity and sovereign digital infrastructure rather than stop investment in the region.

On the ground in Dubai, crypto firms reported continued operations with some disruption to travel and work arrangements. Ben El-Baz, managing director of HashKey MENA, described operations as “broadly functional,” noting cloud-based trading and custody systems reduce dependence on a single physical location. A Binance spokesperson reported employees were offered temporary relocation options as a precaution, and that the “vast majority” chose to remain; some industry conferences were postponed.

Investment managers in the UAE described investor behavior as shifting toward risk awareness without triggering large-scale withdrawals. Hayssam El Masri, senior executive officer at Dubai-based Ento Capital, used the term “refining” to describe how clients moved from confidence-driven allocations to more risk-aware positions while largely remaining invested. Portfolio actions included keeping core holdings in diversified mega-cap tech and rotating within the sector toward infrastructure and software that support AI deployments.

Regulators in Dubai continued to advance rules for digital assets during the period of heightened security concerns. The Virtual Assets Regulatory Authority expanded its activity-based licensing framework and issued guidance on token issuance and derivatives. Sean McHugh, VARA’s head of market assurance, stated that in times of stress market participants seek regulatory clarity over the lightest touch, and that transparent licensing and visible supervision aim to attract institutional business.

Analysts and institutional reports cited structural strengths for Gulf investment in AI and cloud: relatively low energy costs, a dense pipeline of data center projects and large sovereign wealth funds. Deutsche Bank noted global sovereign vehicles controlled roughly $5 trillion and that Abu Dhabi entities have been active backers of AI deals. The bank also warned that short-term oil price swings and security incidents could affect technology valuations, prompting some investors to trim or rotate positions rather than exit entirely.

eToro review of Q1 figures show UAE investors maintaining exposure to AI, cloud and digital infrastructure themes while reassessing risk. Market participants and regulators in the UAE continued to prioritize operational continuity and clearer regulatory rules to support technology and digital-asset businesses in the region.