#USTechFundFlows
February 2026 is revealing a clear split personality in U.S. tech investing.
On the surface, major indices remain near record highs. Underneath? A sharp rotation is unfolding. The “AI-at-any-price” trade is facing its first real stress test of the year — and fund flows are telling the story.
While U.S.-listed ETFs attracted a massive $37.2B in recent weekly inflows, technology-specific funds are no longer the automatic winners. Software-heavy ETFs like IGV experienced noticeable pressure, with the sector sliding roughly 7.5% in a week. Investors are beginning to question stretched valuations and the sustainability of hyper-growth expectations.
Instead of exiting equities entirely, capital is repositioning.
We’re seeing a clear flight to quality. Broad-market vehicles like VOO pulled in billions in a single week, signaling that investors still want tech exposure — just wrapped inside diversified, large-cap stability. It’s not fear. It’s recalibration.
Even more interesting is the global rotation. Emerging market ETFs absorbed record January inflows, highlighting a cooling concentration in expensive U.S. mega-cap tech. When positioning becomes crowded, capital looks for relative value elsewhere.
But this isn’t a tech collapse narrative.
Money is still aggressively flowing into AI infrastructure and semiconductor capacity, fueled by hyperscaler capex projected to reach staggering levels this year. The difference? Investors are separating durable infrastructure plays from speculative software momentum trades.
In short:
2025 was about chasing AI headlines.
2026 is about pricing discipline.
The question now isn’t whether AI matters — it’s how much you’re willing to pay for exposure.
Rotation season is officially here.
