The Rise of Retail Investors in the Age of AI Trading

Every morning, you can find someone in their late twenties quietly browsing through a trading app between sips at a coffee shop close to London’s financial district. There isn’t a single Bloomberg terminal, suit, or briefcase in sight. Only a phone. Just an algorithm humming softly in the background. It’s a tiny scene that’s simple to ignore. However, observing it gives the impression that something truly important has already occurred, and the majority of those who ought to be paying attention are still ignoring it.

It is becoming impossible to ignore the numbers. 19% of retail investors now use AI tools to choose or modify their investments, up from 13% just a year ago, according to eToro’s most recent Retail Investor Beat, a quarterly survey that covers 11,000 investors across 13 countries. In just a year, that represents a 46% increase in adoption. Not a forecast. Not a prediction. Completed already.

Not only is the growth impressive, but so is the people who are growing. Although Gen Z is heavily involved, this is not a story about them exclusively. With a 72% adoption rate, millennials have surpassed Gen Z’s 69%. However, in just one year, the percentage of Boomers—investors over 60 who built their entire financial lives without even a personal computer—who are open to AI tools has increased from 30% to 35%. Such an intergenerational change is not an accident. Beneath the surface of regular investing, something structural is shifting.

A portion of it is straightforward: the tools have become simpler. However, a portion of it stems from the fact that retail investors have experienced enough market cycles over the previous five years to no longer rely solely on intuition. The 2021 meme stock craze burned some, enriched others, and made almost everyone a little more skeptical of their own intuition. Millions of new investors entered the market overnight as a result of the pandemic years’ flood of stimulus funds. In the third quarter of 2025 alone, payment for order flow data—the compensation brokers receive for routing trades—rose 51% year over year. Approximately one-fifth of all US equity volume is currently made up of retail traders. That is no longer a side story.

When eToro asked investors why they would be willing to let AI choose their investments, 42% responded that it would save time on research, and another 42% simply stated that they thought AI was the way of the future. When those two responses are placed side by side, it’s clear that people are simultaneously realistic and idealistic. They want to be on the correct side of history and they want efficiency. Both of those impulses might be perfectly normal.

Lale Akoner, Global Market Strategist at eToro, put it simply: two and a half years after ChatGPT debuted, AI has transitioned from novelty to true utility in the way regular people handle their finances. What began with younger investors experimenting during lunch breaks and late nights has now spread across demographics at a rate that few in the industry had anticipated. She contends that the playing field is becoming more level. Although the exact level it will reach is still unknown, the direction appears clear.

However, enthusiasm and mastery are not the same thing. Only 7% of UK adults currently use AI to help manage their finances or make investment decisions, and only 5% would trust it as a primary source of financial information, according to a different set of studies. Many adults just don’t yet see its place. Early adopters, who are younger, have higher incomes, live in cities, and are accustomed to using digital banking, are outperforming the general population by a wide margin. There is a genuine and expanding knowledge gap.

This disparity is significant because retail investors have traditionally been momentum-driven. Retail portfolios strongly favor stocks in the top quintile of nine-month price trends, according to research from Empirical Research Partners. Sometimes they follow what works, and other times they don’t. Since AI-related stocks have been profitable for a number of years, 55% of investors surveyed predict that their prices will keep rising through 2025. It’s more difficult to determine whether that confidence is a result of conviction or simply recent bias disguised in data, and it probably merits more skepticism than it currently receives.

According to 23% of respondents, AI is the most important topic that retail investors want to learn more about in the upcoming year, surpassing ETFs, cryptocurrency, and tax regulations. That is noteworthy in and of itself. It implies that people aren’t merely using these tools mindlessly; many appear to be aware that their knowledge is incomplete and wish to take action. Historically, investors who survive challenging markets are distinguished from those who don’t by this combination of awareness and action.

Observing all of this, it seems as though the financial industry is in an awkward middle stage, past the stage where AI in investing was merely a talking point but not yet at the stage where its advantages and disadvantages are well-defined. The tools are authentic. The adoption is genuine. There are still unanswered questions regarding algorithmic transparency, data accuracy, and what happens when millions of retail investors receive identical AI-generated signals at the same time. Unbeknownst to them, the coffee shop investor using the trading app is a part of something bigger. It appears that everyone else is as well.