Investors in the United Arab Emirates have been buying into beaten-down AI and software names rather than exiting markets, even as regional tensions raise questions about the Gulf’s role as a global AI and digital-infrastructure hub.
eToro data shared with Cointelegraph show UAE users increased positions in software and AI infrastructure stocks that fell sharply in Q1, a pattern consistent with ‘buying the dip’ instead of broad derisking. Market analyst Josh Gilbert at eToro says UAE investors became more selective on risk during the quarter, focusing on long-term structural themes rather than adopting a blanket risk-off stance. The most notable purchases were in AI and infrastructure-related equities: ServiceNow saw holdings rise about 125%, Super Micro Computer about 65%, Adobe about 54%, and Oracle about 38% among UAE users despite market pressure. On crypto-linked equities, Strategy Inc. remained the eighth-most-held stock for UAE users, underscoring continued exposure to crypto plays.
Pressure on Gulf AI ambitions
The US-Israel conflict and tensions with Iran have highlighted new vulnerabilities for Gulf tech assets. A Deutsche Bank report dated April 13 pointed to reported strikes on Amazon Web Services data centers in the UAE and Bahrain and to threats against the planned 1GW Stargate campus in Abu Dhabi. Those developments, along with sharp oil-price swings driven by the conflict, have increased volatility and raised concerns about the resilience of regional data centers, logistics and cross-border tech projects.
Still, Deutsche Bank argued the shock is more likely to concentrate and intensify demand for AI, cybersecurity and sovereign digital infrastructure in the Gulf rather than derail it. The UAE and the wider region retain advantages that support continued investment: low-cost energy, a dense pipeline of data-center projects, and large pools of sovereign capital. Deutsche Bank noted sovereign wealth vehicles and other state-backed investors remain aggressive backers of global AI deals, and estimates put global sovereign assets around $5 trillion by 2025, with Abu Dhabi among the most active.
How investors are responding
UAE investors appear to be maintaining core exposure to diversified mega-cap tech while rotating within the sector toward infrastructure and software names perceived as central to long-term AI adoption. Gilbert characterized this as a nuanced, risk-aware tactic rather than a wholesale exit from the region or sector.
Crypto firms, operations and resilience
Crypto companies in Dubai report the conflict has slowed some activities but not ended the city’s ambitions as a regional hub. HashKey MENA managing director Ben El-Baz said operations have remained broadly functional, helped by cloud-based trading and custody systems that reduce reliance on any single physical site even as remote work and travel disruptions occur. Binance likewise said the business continued operating, with some employees offered temporary relocation as a precaution, while a number of major events, including Token2049, were postponed.
Ento Capital senior executive Hayssam El Masri described the situation as refining rather than derailing the Gulf Cooperation Council narrative. According to him, investors have shifted from being confidence-driven to becoming more risk-aware, but they are generally not abandoning the region. He suggested that demonstrating war-tested resilience and continuing investment in AI, cloud and crypto infrastructure could ultimately strengthen the GCC’s strategic position.
Regulatory clarity as an anchor for capital
Regulators in Dubai have pressed ahead with rulemaking during the turmoil. The Virtual Assets Regulatory Authority has continued to roll out an activity-based framework, providing guidance on token issuance and formal rules for crypto derivatives. Sean McHugh, VARA’s head of market assurance, said that in periods of stress serious market participants seek clarity rather than the lightest touch. He argued that transparent licensing, visible supervision and active enforcement are intended to convince institutions to view Dubai as a strategic base rather than an opportunistic stopover.
Outlook
While regional conflict has introduced fresh risks for data centers, logistics and cross-border tech projects, UAE investors’ tendency to buy AI-related weakness and continued sovereign backing for digital infrastructure suggest the Gulf’s push into AI and crypto is being tested but not abandoned. Market participants, crypto firms and regulators are adapting: investors are more selective, firms are relying on distributed cloud systems, and authorities are offering clearer rules to anchor long-term capital.
This rewritten report is based on data and commentary from market participants, industry groups and published analysis; readers should verify details with original sources and reporting.