Investors Shift Portfolios Amid Iran Conflict: Oil and Defense Stocks Rise, Crocs and Starbucks Decline

Amid the ongoing turmoil in the Middle East, investors are revamping their portfolios by focusing on oil and defense sectors, while moving away from established consumer brands.

According to fresh data from investment platform Etoro, there’s a notable trend of reallocating funds towards companies like Chevron, a major U.S. oil player, and Kratos Defense, known for its drone technology. Meanwhile, brands such as Crocs and Starbucks are finding themselves out of favor.

The geopolitical tension involving the U.S., Israel, and Iran has caused a surge in oil prices, particularly after the strategic Strait of Hormuz faced disruptions.

As a result, oil prices have soared to $100 per barrel, a sharp increase from the $64 per barrel mark recorded a year ago, leading to a rise in fuel costs.

Chevron, in particular, has experienced a significant uptick in interest, with a 64% rise in shareholder numbers this quarter, marking it as the top gainer among Etoro’s UK clientele.

The company’s strategic operations in Venezuela, a nation rich in oil reserves, further bolster its position, especially after the U.S. took control of Venezuelan 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.’