Software investors collectively lost their minds on Tuesday, on the release of Anthropic PBC’s new plug-in for its Claude Cowork agent, targeting enterprise automation. The

artificial intelligence

agent’s 11 plug-ins focus on no-code AI tasks in the legal, sales, marketing and data analytics sectors.

The release triggered a sharp sell-off in software stocks, with some estimates of total market capitalization losses of up to US$300 billion on Tuesday alone. Investors have been very worried about how AI might “eat” software companies, particularly software-as-a-service (SaaS) enterprise firms. Many software stocks are at multi-year lows. The issue, of course, is that Anthropic is not the only AI agent that will be coming out with new programs. There are dozens. Investors are selling software stocks, even though fundamental numbers (as reported so far) are not showing any negative AI impact.

But right now, sentiment is ruling the software market. Let’s look at five sectors that still might be vulnerable, or could benefit, from new AI developments.

Healthcare

This sector should see significant benefits from AI. AI is already used to improve diagnostics in radiology and pathology, triage and personalized treatment planning. Studies are showing that AI is often matching or exceeding human accuracy on narrow tasks. AI is also attacking administration overhead costs, such as coding, documentation and scheduling. AI has also been proven to be beneficial in accelerating drug discovery and clinical trial design, which compresses timelines and shifts labour needs. HCA Healthcare Inc., one of the largest for-profit hospital operators in the United States, has seen its stock rise about 49 per cent in the past year, partially due to cost-savings initiatives driven by AI.

Finance

Banks should be beneficiaries of AI, using AI to drive costs lower and monitor credit more effectively. Banks and asset managers already use AI for fraud detection, credit scoring, risk modeling and algorithmic trading, changing how decisions are made and how many people need to be involved in such decisions. Customer-facing functions, such as chat-based support, robo-advice and underwriting workflows are also more and more often being automated, pressuring many traditional back-office and junior analytical roles, resulting in cost savings through job attrition. On the other hand, alternative asset companies such as Blue Owl Capital Inc. continue to see losses in their stocks as investors fret that finance company loans to software companies may go sour if AI starts cannibalizing their business. Blue Owl shares are down 19 per cent this year.

Retail and commerce

Shopify Inc.

shares took a hit this week on AI-related fears. But the company could actually be a beneficiary of AI developments, not a victim. Recommendation engines, dynamic pricing, inventory optimization and better AI search could be helpful for its merchant customers. Essentially, AI could reshape how consumers discover and buy products both online and in stores. In physical retail stores, AI can improve self-checkout, and aid in computer-vision loss prevention. Automated fulfillment centres could reduce demand for routine frontline and warehouse labour.

Amazon.com Inc.

is perhaps leading this charge, as it has its own line of robots and has announced numerous staff layoffs in the past several months.

Legal and other professional services

Thomson Reuters Corp.

stock took a hit this week, as Anthropic’s release may be very useful in the legal industry and Thomson derives about 30 per cent of its revenue from this sector. AI developments are improving contract review, due-diligence summarization and brief-drafting in the legal field. “Grunt work” at legal firms is increasingly being given to AI agents. Similar patterns are emerging in accounting and other advisory work, where routing document analysis and compliance checks are becoming largely automated. Such developments are hitting stocks such as advisory and tax company Anderson Group Inc., whose shares are down about 20 per cent already this year, according to Bloomberg data. Sales-based software companies such as Salesforce Inc. could also be vulnerable. Its stock is already down 26 per cent this year as general AI fears sweep the sector.

Manufacturing and industrial

AI predictive maintenance, quality inspection via computer aided vision and generative design tools are already transforming plant operations and product development. AI is more likely to be a benefit here, but consultants and systems integration companies could certainly see some competitive pressures. Integrated AI in supply chains has already hurt sentiment toward logistics stocks such as

Descartes Systems Group Inc.

and

Kinaxis Inc.

Forecasting, routing, inventory planning and robotics reduces the need for unskilled shop-floor tasks while raising demand for data and systems engineers. Industrial robotics and automation companies such as Teradyne Inc. and Symbotic Inc. could be beneficiaries of this trend.

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Peter Hodson, CFA, is founder of 5i Research Inc., an independent investment research network helping do-it-yourself investors reach their investment goals. He is also portfolio manager for the i2i Long/Short U.S. Equity Fund. (5i Research staff do not own Canadian stocks. i2i Long/Short Fund may own non-Canadian stocks mentioned.)

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