Sentiment shifted in the stock market this week as investors began to question the value of corporate software and IT services in an age where artificial intelligence may be able to do the job in-house. But the market hasn’t significantly dropped despite the selloff, with analysts saying that investors are instead rotating through to other sectors. This might feel familiar to the more seasoned investor, as it is a flash of déjà vu to the late 1990s when the rewards and risks posed by dotcom innovations began trickling through. The AI boom, most analysts agree, is not the same as the dotcom bubble and its subsequent pop. This week’s shift away from IT and SaaS (software as a service) assets was in relation to an update from Anthropic, which launched plug-ins for its Claude Cowork agent last week that could streamline work in data analysis, legal, marketing, and sales.
The fallout has been relatively contained: Neither the S&P 500 or the Nasdaq was down more than 2% yesterday, and stocks across Europe and Asia are relatively flat this morning. But the cycling out of certain impacted sectors, even on a relatively small level, and into other industries, does beg comparison with shifts the market observed in the last technological revolution.
