Traders work on the floor of the New York Stock Exchange (NYSE) in New York, US, on Thursday, Feb. 5, 2026. (Michael Nagle/Bloomberg via Getty Images)
"Sell first, think later." That's how Barclays summarized the mentality gripping investors amid a selloff of software and other stocks that the bank warns could continue in the near-term.
“In the near term, we acknowledge that momentum may be unstoppable with no clear catalyst to stop the rout," Barclays analyst Emmanuel Cau wrote in a Friday client note.
Barclays added that the recent spate of volatility in financial markets has shown that investors are displaying "no mercy for anything remotely seen as an AI loser." Those losses have shaken stocks in commercial and technology firms
Last week, Anthropic released new add-ons for its Claude AI model that supposedly allows lawyers to review contracts and complete other tasks common in the legal sector with ease. The AI firm followed with a plug-in meant for professionals working in financial services, triggering fears of widespread automation in white-collar industries.
Investors responded with a sell-off that's been rocking Wall Street. It hit the software companies hard, and at least $400 billion in market capitalization was lost within days.
Microsoft $MSFT's stock alone dropped from $480 a share on Jan. 28 to just over $400 per share as of Friday morning — a 16% reduction in its value.
AI automation fears aren't likely to abate anytime soon. Microsoft AI CEO Mustafa Suleyman said in a Financial Times interview published Thursday that he expects widespread automation in the professional services sector within two years.
"So white-collar work, where you're sitting down at a computer, either being a lawyer or an accountant or a project manager or a marketing person — most of those tasks will be fully automated by an AI within the next 12 to 18 months," Suleyman said.
