These stocks have been rocked by AI fears, but is the selloff overdone?

Key points

• AI tools from Anthropic sparked a broad sell-off in software and data stocks last week that has continued to affect sentiment across equity markets

• Several other sectors have since been hit with wealth management, insurance brokers and real estate services coming under fire

• The selloff looks to be largely fear driven with little proof new AI tools will upend companies’ business models

What’s happening?

Stocks across a range of sectors including business software, insurance brokers, wealth managers and real estate have been falling like dominoes after the release of a batch of new AI tools that has sent shockwaves through the market.

A week ago, Anthropic launched its new AI model, Claude Opus 4.6, which unlike many similar models is aimed at enterprise users. It comes hot on the heels of the release in January of Cowork, an AI coding platform designed for firms without in-house coding expertise. Cowork plug-ins have been made freely available across a wide range of industries, which may prove disruptive if usage increases significantly. These developments have stoked fear about disruption in enterprise software, worrying investors about the durability of future revenue.

Enterprise software stocks were rocked. The S&P 500 Software & Services Index, which has 140 constituents, plunged. It’s now down about 16% in 2026 but the decline is not evenly spread. Microsoft, Palo Alto Networks, ServiceNow, CrowdStrike Holdings and Datadog were some of the worst-hit stocks in the recent selloff. Losses were also seen across the likes of Salesforce, Adobe, Thomson Reuters, LegalZoom and Intuit among others.

Several UK-listed companies were affected, notably RELX, the information and analytics company that owns the LexisNexis legal portal. Others such as Sage, Experian and LSEG were lower too. It’s worth noting that LSEG, which has pushed its data and analytics business, has been under pressure since Anthropic released its Claude for Financial Services tool last July. Investors, such as the activist Elliott Management, would argue that the likes of Anthropic and OpenAI cannot replicate or replace LSEG’s real-time data. Nevertheless, the last week has underlined that AI disruption risks remain at the front of investors’ minds right now.

As I said a week ago, the plunge across software and data stocks had the feel of a ‘fire sale’ because investors suddenly no longer have any visibility or confidence in their models. 

This is all about the growing dispersion in the AI trade. We don’t know who’s going to win or lose, and we don't yet know really how useful some of these tools are, but we reckon a lot of these firms are going to struggle to generate margin as AI will compress and compete away competitive advantage. To make a general point, there are clearly bargains with some of these names as some will be winners, but investors are turning backs because they are saying 'we don't know how to price these stocks’.

Following this we’ve seen other sectors affected as the AI-fear trade broaden to include other types of business. Large insurance brokers slumped this week after the launch of a ChatGPT-based app that will help homeowners select and buy insurance. Willis Towers Watson, Aon and Ryan Speciality were among the companies hit hard by the announcement. 

Wealth managers took a nosedive this week after Altruist launched a tool to help financial advisers personalise clients’ investment strategies. The tool, Hazel, promises to do the work “within minutes”. LPL Financial, Charles Schwab, ETrade parent Morgan Stanley, Raymond James were among the stocks affected. UK names were caught too with St James’s Place, Quilter and Aberdeen Group also selling off. In Europe, French asset manager Amundi and Swiss wealth manager Julius Baer fell.

By Wednesday you had the sense markets were on the hunt for the next victim and it came by way of real estate services companies. Big US groups CBRE, Jones Lang LaSalle and Cushman & Wakefield all fell 12-13%.These firms have moved into areas such as investment sales and property management and valuation, areas seen potentially vulnerable to AI. It’s worth noting that these were significant moves on no clear catalyst on a relatively calm day for US equity markets.

Below is a snapshot of some of the biggest movers in the sectors we've discussed.