AI Disruption Fears Trigger Major Stock Selloff

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Investors React to Growing AI Threat

Artificial intelligence (AI) is shaking up the stock market. Investors are increasingly selling shares of companies they believe could be disrupted by AI technology. According to Bank of America, a special list of 26 “at-risk” companies has performed much worse than the S&P 500 index, underperforming by 22 percentage points since mid-May 2025.

Big Losses for Service-Based Companies

Several well-known companies have seen their stock prices drop sharply in 2025:

Wix.com – down at least 33%
Shutterstock – down at least 33%
Adobe – down 23% due to fears AI-generated content will replace traditional creative services
ManpowerGroup – down 30% amid automation concerns
Robert Half – down over 50% for the same reason
Gartner – dropped 30% in just five days after cutting revenue forecasts, with analysts pointing to AI disruption

Advertising Agencies and Automation Impact

AI technology is also hitting advertising firms. Shares of Omnicom fell 15% and WPP plunged more than 50% as AI tools increasingly automate ad creation and reduce the need for traditional services.

Tech Giants Invest Heavily in AI

While some companies suffer, major tech firms are racing ahead. Microsoft, Meta, Alphabet, and Amazon are expected to spend nearly $350 billion combined on AI infrastructure in their current fiscal years. This is almost 50% more than they spent last year, showing how fast AI investment is growing.

Winners in the AI Shift

Not every company is struggling. Language learning platform Duolingo has thrived by successfully adding AI into its services, showing that adapting to the technology can lead to growth rather than decline.

Analyst Warnings

Experts caution that service-based companies with large workforces are the most vulnerable to AI disruption. Businesses that fail to integrate AI into their models risk losing customers and revenue as automation becomes more common.