Potential assets at risk of being eliminated!
In the ever-evolving world of technology, Wall Street is grappling with the relentless shift towards Artificial Intelligence (AI). Experts predict this trend will continue unabated in the coming months, raising concerns for many companies.
The stock market's gains in 2025 have been heavily carried by the top AI-centric tech firms such as Nvidia, Microsoft, and Apple. However, it's the non-tech firms and those outside the leading AI-focused "Magnificent Seven" tech giants that are feeling the brunt of this disruption.
Companies like Wix.com, Shutterstock, Adobe, and ManpowerGroup, among others, have seen their stocks take a hit. Wix.com and Shutterstock, for instance, have lost over 33% this year, while Adobe's stock has fallen by 23%. Robert Half's stock has halved this year, reflecting the pressure on staffing agencies due to potential automation making their services obsolete.
The reason for this is simple: AI can do tasks faster and cheaper, and experts like Adam Sarhan of 50 Park Investments believe that companies where AI can do tasks will be wiped out.
Gartner's stock plummeted by 30% in a week after lowering its revenue forecast. The threat of cheaper AI solutions is seen as the main cause for Gartner's setback, in addition to government spending cuts.
Investors are also fearful of customers switching to AI platforms that can generate images and videos. This fear is not unfounded, given historical examples of new technologies destroying entire industries. Think of the telegraph being replaced by the telephone and video stores by streaming services.
However, not all news is bleak. Language learning app Duolingo, for instance, has managed to increase its 2025 forecast, even with the rise of AI translation services. The company is using AI cleverly to its advantage.
The line between winners and losers in the AI shift is becoming increasingly clear. Companies that do not have bold, clear AI strategies or the scale to invest heavily in AI-related infrastructure and innovation are at risk. On the other hand, the major AI technology firms are dominating market growth and investor capital.
Firms not aggressively investing in or adopting AI may face diminished investor interest and valuation pressures. Industries heavily reliant on legacy technology or slower to integrate AI are also at risk. Companies unable to adapt to fast-changing regulatory environments from evolving U.S. AI policy may face compliance costs and operational challenges.
Smaller firms or those lacking capital to compete with the enormous AI-related spending that the largest companies are committing may find themselves outpaced in market relevance and innovation.
In summary, the greatest risk is borne by companies that do not have bold, clear AI strategies or the scale to invest heavily in AI-related infrastructure and innovation, while the major AI technology firms dominate market growth and investor capital. This dynamic creates a "winner takes most" scenario in U.S. financial markets driven by AI disruption.
[1] CNBC, "AI disruption: Why the winners will take it all," link [2] McKinsey & Company, "The US government's AI strategy: What it means for business," link [3] Forbes, "The 10 Most Valuable Companies In The World," link [4] VentureBeat, "AI spending to hit $300 billion in 2025, driven by cloud, edge, and chip investments," link [5] Fortune, "The AI Revolution: How Artificial Intelligence Is Transforming Industries," link
- The shift towards Artificial Intelligence (AI) is causing significant concerns for companies, as they see the stock market's gains being primarily carried by AI-centric tech firms, while non-tech firms like Wix.com, Shutterstock, Adobe, and ManpowerGroup are feeling the brunt of this disruption, with some stocks like Robert Half's halving this year.
- Investors are warned about the potential risk for companies where AI can perform tasks, as these companies may see their stocks take a hit and may even become obsolete, as historical examples of new technologies destroying entire industries like the telegraph being replaced by the telephone and video stores by streaming services, show.
