AI disruption hits markets sooner than expected

Artificial intelligence is rapidly transforming U.S. financial markets, elevating some companies while threatening others as investors anticipate swift changes. Nvidia Corp., valued near $4.5 trillion, stands as the world’s most valuable company, while AI innovators like OpenAI and Anthropic have attracted tens of billions in funding. However, investors are bracing for market shifts comparable to the early internet era, repositioning portfolios away from firms vulnerable to AI-driven competition. Platforms such as Wix.com Ltd., Shutterstock Incorporated, and Adobe Incorporated are among 26 companies identified by Bank of America as high-risk due to AI disruption. Since mid-May, these companies have underperformed the S&P 500 Index 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 attributed to AI, software capable of programming, answering complex queries, and generating images or videos is challenging traditional business models. Giants like Microsoft Corp. and Meta Platforms Inc. are committing hundreds of billions to AI development, intensifying competitive pressures. Wix.com and Shutterstock shares have dropped over 33% this year, contrasting with an 8.6% rise in the S&P 500. Adobe’s stock has fallen 23%, amid concerns customers may shift to AI-generated images, exemplified by Coca-Cola’s recent AI-based ad campaign. The unease extends beyond creative and staffing sectors. Gartner Incorporated’s shares plunged 30% last week, its steepest weekly decline ever, after lowering its annual revenue forecast. While Gartner cited U.S. policy changes, analysts suggest AI could undercut demand for its research services. Morgan Stanley described the update as fueling the AI disruption narrative, with Baird noting increased worries about AI’s impact.

Not every business on AI’s path is struggling

Technology has historically displaced older markets—from telegraphs to telephones, Blockbuster 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.” Despite AI competition, Duolingo Inc. has doubled its share price over the past year, boosted by its own AI-powered tools and raised 2025 revenue guidance. However, questions remain about the sustainability of such growth. The gap between market winners and laggards has widened significantly in 2025. Earlier concerns about Chinese low-cost AI products slowing U.S. dominance have been offset by increased spending from major tech firms. Microsoft, Meta, Alphabet Inc., and Amazon.com Inc. are projected to invest around $350 billion in capital expenditures this fiscal year—nearly 50% more than last year—primarily to expand AI infrastructure. This surge benefits companies like Nvidia, whose processors power most AI systems. Identifying which companies face the greatest risk is complex. Alphabet, a leader in AI, remains on Bank of America’s high-risk list partly because it must defend its dominance in online search. In clearer cases, advertising giants like Omnicom Group Inc. and WPP Plc have seen significant stock declines amid reports that Meta plans to fully automate ad creation.

Frequently Asked Questions (FAQ)

AI's Market Impact

Q: Which companies are identified as high-risk due to AI disruption? A: Bank of America identified companies like Wix.com Ltd., Shutterstock Incorporated, and Adobe Incorporated as high-risk due to AI disruption. Q: How have these high-risk companies performed recently compared to the S&P 500? A: Since mid-May, these companies have underperformed the S&P 500 Index by approximately 22 percentage points. Q: What types of businesses are considered particularly vulnerable to AI disruption? A: Service-based businesses with a high headcount are considered particularly vulnerable, as AI can increasingly perform tasks faster and cheaper, such as graphic design, administrative work, and data analysis. Q: Are there examples of companies that have successfully adapted or benefited from AI? A: Yes, Duolingo Inc. has seen its share price double, boosted by its own AI-powered tools and raised revenue guidance.

AI's Broader Economic Influence

Q: How are major tech companies investing in AI? A: Major tech firms like Microsoft, Meta, Alphabet, and Amazon are projected to increase their capital expenditures significantly, investing around $350 billion this fiscal year, primarily to expand AI infrastructure. Q: Which companies are benefiting from this surge in AI investment? A: Companies like Nvidia, whose processors power most AI systems, are benefiting from this surge. Q: What are some of the challenges in identifying companies most at risk from AI? A: Identifying risk is complex; even AI leaders like Alphabet are on high-risk lists due to the need to defend their existing market dominance.

Crypto Market AI's Take

The rapid advancement and integration of Artificial Intelligence are undeniably reshaping the financial landscape, impacting markets and companies at an unprecedented speed. At AI Crypto Market, we leverage sophisticated AI agents and machine learning models to not only analyze these market shifts but also to identify opportunities and mitigate risks. Our platform provides real-time market intelligence, helping investors navigate the complexities of AI-driven disruption and understand how emerging technologies like AI intersect with the volatile cryptocurrency market. We aim to empower our users with the insights needed to adapt and thrive in this evolving economic environment, from understanding the impact of AI on traditional industries to exploring the potential of AI in shaping the future of decentralized finance.

AI disruption hits markets sooner than expected

AI disruption hits markets sooner than expected

Not every business on AI’s path is struggling

Frequently Asked Questions (FAQ)

AI's Market Impact

AI's Broader Economic Influence

Crypto Market AI's Take

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