Amid the escalating turmoil in the Middle East, investors are reconfiguring their portfolios to favor oil and defense sectors, while stepping away from popular consumer brands. This strategic shift reflects their increased focus on stability and growth opportunities within industries poised to benefit from geopolitical tensions.

According to fresh insights from the investment platform Etoro, investors are redirecting their funds towards major players like U.S. oil giant Chevron and the drone manufacturer Kratos Defense. In contrast, they’re pulling back from consumer favorites such as Crocs and Starbucks, signaling a significant change in investment priorities.

The ongoing U.S.-Israeli confrontations with Iran have led to a surge in oil prices, largely due to the effective closure of the critical Strait of Hormuz shipping route. This blockade has intensified the demand for oil, pushing its price to $100 per barrel, a steep climb from $64 just a year ago, and consequently causing fuel costs to soar.

Chevron has notably experienced a 64% rise in its investor base this quarter, emerging as the top gainer among Etoro’s UK clientele. This growth is not just due to the spike in oil prices; Chevron’s strategic operations in Venezuela also play a role. The company is one of the few American oil firms with operations in the region, positioning it advantageously to tap into Venezuela’s substantial oil reserves following the U.S. capture of President Nicolás Maduro.

Chevron has unsurprisingly seen a 64 per cent increase in holders this quarter, making it the biggest riser among Etoro’s UK users. 

The company is also one of the few US oil firms operating in Venezuela, meaning it is well positioned to access the country’s vast oil reserves after the US captured its President, Nicolás Maduro. 

Energy companies Shell and ExxonMobil also saw sharp rises in holders, coming in third and sixth place in Etoro’s top ten list, which captures the first three months of 2026. 

Investors continued to bet on artificial intelligence’s growth, with USA Rare Earth seeing a 60 per cent jump in holders.

Surge: The US-Israeli war with Iran has driven up the price of oil after the vital shipping artery, the Strait of Hormuz, was effectively closed

Rare earth metals are crucial for the manufacture of high-tech products from semiconductors to weapons but are also key for AI development and data centres. 

China’s tightening export controls have heightened the importance of a secure rare earth metal supply, Etoro said. 

Defence stocks have traditionally attracted investor interest during periods of war – and the conflict we are seeing across the globe now is no different. 

The US defence and security solutions firm Kratos ranked fourth with a 39 per cent increase in holders, while AeroVironment and RTX Corporation saw a 34 per cent and 33 per cent rise respectively. 

But investors have moved away from consumer names such as Crocs and Starbucks. Crocs saw a 16 per cent loss in holders and Starbucks saw a 14 per cent drop. 

US retailer Target saw the sharpest fall at 16 per cent, while media company Warner Bros Discovery saw a 15 per cent loss in holders. 

The sharp rise in the price of oil has stoked fears of inflation, which could cut household spending affect the bottom line of major retailers. 

It could particularly hurt spending on non-essentials such as clothing, entertainment and coffee.  

The United Parcel Service also struggled, losing 14 per cent of its holders on Etoro amid higher shipping costs. 

Investors are still backing the top three most widely held stocks, which were NVIDIA, maker of chips for AI data centres, electric car manufacturer Tesla and logistics giant Amazon. 

Lale Akoner, global market strategist at Etoro, said: ‘Increasing selectivity in the AI and technology sector is becoming more evident, as we can see from the top stocks data. 

‘What we’re seeing is a shift from broad exposure to selective positioning, with capital concentrating in companies that can either enable AI or sit at the application layer where monetisation is clearer.

‘At the same time, UK retail investors are moving further down the value chain. AI is placing real strain on underlying infrastructure. 

‘The growing focus on memory and storage, reflected in names like Micron, highlights how these second-order effects are becoming increasingly investable.’