AI Boom Drives Investors to US Small-Cap Tech Stocks, PSCT ETF Inflows Surge

Investors are pivoting from AI heavyweights like Nvidia to U.S. small-cap technology stocks as the artificial intelligence rally spreads. The Invesco S&P SmallCap Information Technology ETF (PSCT) attracted $49.7 million in inflows in 2026 through May 27, reversing four straight years of outflows, LSEG Lipper data shows. The S&P 600 Small Cap Technology Index has surged nearly 54% year-to-date, compared with a 20.1% gain in the S&P 500 technology sector, the widest gap since 1995. The rotation reflects improved earnings outlooks, lower valuations and direct ties to AI infrastructure such as chipmaking and data centers. “The AI trade has significantly expanded,” said Oren Shiran, manager of the Lazard US Systematic Small Cap Equity ETF, noting that small caps are becoming key beneficiaries in the second and third waves of the AI supply chain. MaxLinear and Ichor Holdings have more than doubled in 2026, but some analysts caution that speculative buying and rising global bond yields pose risks to the debt-reliant segment.