Investors hunt for AI winners in small-cap tech stocks as overlooked ETF sees major inflows

For years, the AI trade had exactly one playbook: buy Nvidia, buy Microsoft, buy the biggest names on the board, and watch the returns roll in. That playbook is getting a rewrite.

Investors are increasingly moving capital into small-cap US technology stocks positioned to benefit from AI growth, and the clearest proof point is the Invesco S&P SmallCap Information Tech ETF (PSCT). The fund has pulled in $49.7 million in net inflows in 2026 as of May 27, snapping a streak of four consecutive years of outflows. That’s not earth-shattering money by mega-cap standards, but for a small-cap tech ETF that investors had been steadily abandoning, it’s a meaningful reversal.

The small-cap AI thesis takes shape

The poster child for this trade is MaxLinear (MXL), which has seen its stock price surge by nearly 800% over the past year. The company makes high-speed optical connectivity solutions, the kind of technology that AI data centers need to shuttle enormous volumes of data between servers.

Why the rotation is happening now