August 10, 2025
5 min read
@CPOfficialtx
Artificial intelligence is rapidly transforming U.S. financial markets, creating winners and losers as investors anticipate swift changes. Nvidia Corp., valued near $4.5 trillion, stands as the world’s most valuable company, while AI pioneers like OpenAI and Anthropic have raised tens of billions in funding. Investors are repositioning portfolios away from companies vulnerable to AI-driven disruption, expecting reduced demand for their traditional services. Bank of America identified 26 firms at highest risk, including Wix.com Ltd., Shutterstock Incorporated, and Adobe Incorporated. Since mid-May, these stocks have underperformed the S&P 500 by roughly 22 percentage points, after previously tracking the market closely since ChatGPT’s debut in late 2022.
“The disruption is real,” said Daniel Newman, CEO of the Futurum Group. “We thought it would happen over five years. It seems like it is going to happen over two. Service-based businesses with a high headcount are going to be really vulnerable.”
While no major collapses have yet been directly linked to AI, software capable of programming, answering complex queries, and generating images or videos is challenging established business models. Companies such as Microsoft Corp. and Meta Platforms Inc. are investing hundreds of billions in AI development, intensifying competition. Wix.com and Shutterstock shares have dropped over 33% this year, compared to an 8.6% gain for the S&P 500. Adobe’s stock declined 23%, amid concerns that customers may increasingly rely on AI for creative tasks, as exemplified by Coca-Cola’s AI-generated ad campaign.
The unease extends beyond creative and staffing sectors. Gartner Incorporated’s shares plunged 30% last week—their steepest weekly drop ever—after lowering its annual revenue forecast. Though Gartner cited U.S. policy changes, analysts suggested AI could provide cheaper alternatives to its research services. Morgan Stanley noted this fueled the AI disruption narrative, while Baird highlighted growing worries about AI’s impact.
Technology has historically displaced older markets—from telegraphs replaced by telephones to Blockbuster losing out to Netflix. Adam Sarhan, CEO of 50 Park Investments, remarked, “Any company where you’re paying someone to do something that AI can do faster and cheaper will be wiped out, think graphic design, administrative work, data analysis.”
Duolingo Inc., despite AI translation competition, has doubled its share price over the past year after raising its 2025 revenue guidance, partly thanks to its own AI-powered tools. However, questions remain about the sustainability of such growth.
The gap between stock market winners and laggards has widened significantly in 2025. Early in the year, low-cost AI products from China raised concerns about U.S. dominance, but major tech firms have instead increased their AI budgets. Microsoft, Meta, Alphabet Inc., and Amazon.com Inc. are expected to invest approximately $350 billion in capital spending this fiscal year—almost 50% more than last year—primarily to expand AI infrastructure. This surge benefits companies like Nvidia, whose processors power most AI systems.
Identifying the most at-risk companies is complex. Alphabet, a leader in AI, remains on Bank of America’s high-risk list partly because it must defend its dominant online search business. In clearer cases, advertising giants Omnicom Group Inc. and WPP Plc have seen their stocks fall 15% and over 50%, respectively, amid reports that Meta plans to fully automate ad creation.
Originally published at Cryptopolitan on August 9, 2025.
Originally published at Cryptopolitan on August 9, 2025.