New Delhi: It feels like every time I open my trading app these days, there is a new sector getting hammered by what the market is calling the AI scare trade. We saw it happen to software companies a few weeks ago when everyone realized that smart AI could write code faster than humans. Now the panic has shifted to the old school industries that we usually think are safe from tech disruption.
On Thursday, the selling pressure moved aggressively to commercial real estate and logistics stocks. Investors are terrified that artificial intelligence will reduce the need for physical office space and make human dispatchers in trucking companies obsolete. It was a difficult day for the markets, and it shows that almost no corner of the business world is safe from these growing fears right now.
Real estate stocks take a big hit
The big names in property management took a serious nosedive on Thursday. CBRE Group is a massive commercial real estate services company, and its shares fell 8.8 per cent. That brings its two day decline to a whopping 20 per cent, which is the worst move for them since the pandemic days of 2020. Other big players like Jones Lang LaSalle fell 7.6 per cent and Cushman & Wakefield dropped 12 per cent.
It seems traders are betting that better AI tools will mean companies need fewer employees in offices, or they can work from home more easily with AI assistants. Jeffrey Langbaum, an analyst covering office REITs for Bloomberg Intelligence, noted that this worry isn’t exactly fresh but it is intensifying.
He said, “Concerns about increased use of AI applications translating into reduced demand for office space have been around for some time, this is not new.”
Langbaum also pointed out the shift in market sentiment. “However, after yesterday’s selloff in the brokers, we are seeing the fear spill back over to the actual office space providers,” he added.
Logistics firms face the heat
The trucking and logistics sector also crashed, and the reason is actually quite strange if you think about it. The panic was sparked by an update from a tiny AI logistics firm called Algorhythm Holdings Inc. Interestingly, this company used to sell karaoke products as The Singing Machine Company before they rebranded in 2024.
Algorhythm said its platform helped customers scale freight volumes by 300 per cent to 400 per cent without a corresponding increase in operational headcount. This news made investors worry that big, traditional logistics firms are too bloated.
Here is how the big names performed during the selloff:
- CH Robinson Worldwide Inc plunged by a record 24 per cent at one point.
- Landstar System Inc fell 18 per cent.
- The Russell 3000 Trucking Index dropped 7.8 per cent.
- European firm DSV A/S closed down 11 per cent.
Disruption in the market models
It is wild to think that a company with less than $2 million in sales could tank a major trucking index, but that is the mood right now. The fear is that AI-powered tools and applications can upend the business models of many industries. This trend really intensified following the rollout of new tools by startup Anthropic recently.
While some analysts have warned that the recent steep selling reflects a knee-jerk reaction from traders, the fear is real. Even drug distribution stocks like McKesson Corp slid more than four per cent. For now, it seems investors are shooting first and asking questions later.