"The dueling anxieties have been brewing for months. But they've shifted to the center of the stock market over the past two weeks. The result has been a series of punishing selloffs that have hammered dozens of companies across a number of industries - from real estate services and wealth management, to insurance brokers and logistics firms - and wiped more than $1 trillion from the market values of the big tech companies investing the most in AI."
"The shift marks a major break from the sentiment of the last few years, when speculation that AI would set off a transformative productivity boom kept pushing stock prices higher. While big tech stocks kept rising - sending Meta surging nearly 450% from the end of 2022 until the start of this year, and Alphabet up more than 250% - the hand-wringing over whether it was a bubble about to burst did little to derail the rally."
Investors are balancing two conflicting fears about AI: that the technology could rapidly displace companies across sectors and that massive annual AI expenditures by tech giants may not deliver near-term payoffs. Those tensions intensified recently, triggering broad selloffs that hit dozens of firms across real estate services, wealth management, insurance brokering and logistics, and erased over $1 trillion from the market values of leading AI investors. Big tech previously enjoyed large rallies—Meta up nearly 450% and Alphabet over 250% from late 2022 to early this year—but recent earnings and slow revenue responses to AI spending have unsettled investor confidence.
Read at Fortune
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