{"id":470936,"date":"2026-02-12T21:12:08","date_gmt":"2026-02-12T21:12:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/470936\/"},"modified":"2026-02-12T21:12:08","modified_gmt":"2026-02-12T21:12:08","slug":"us-stocks-drop-as-investors-hunt-for-potential-losers-from-ai","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/470936\/","title":{"rendered":"US stocks drop as investors hunt for potential losers from AI"},"content":{"rendered":"\n

NEW YORK (AP) \u2014 U.S. stocks are dropping Thursday as the market punishes companies seen as potential losers from artificial-intelligence technology<\/a>.<\/p>\n

The S&P 500 fell 1.1% after erasing an early gain that brought it near its all-time high<\/a>. The Dow Jones Industrial Average was down 472 points, or 0.9%, as of 2:20 p.m. Eastern time, and the Nasdaq composite was 1.7% lower.<\/p>\n

AppLovin tumbled 18.3% despite reporting a stronger profit for the latest quarter than analysts expected. Like other software companies, it\u2019s come under pressure recently from worries that AI may undercut its business while fundamentally changing how people use the internet.<\/p>\n

AppLovin CEO Adam Foroughi pushed back on the concerns, saying in a conference call with analysts that indicators show his company is doing well. \u201cThere\u2019s a real disconnect between market sentiment and the reality of our business,\u201d he said.<\/p>\n

Its stock nevertheless increased its loss for the young year so far, which came into the day at 32.2%.<\/p>\n

Cisco Systems dropped 11.6% despite likewise topping analysts\u2019 expectations for profit and revenue last quarter. The tech giant indicated that it may make less profit off each $1 of revenue during the current quarter than it did in the past quarter.<\/p>\n

Analysts said that could be an indicator of higher prices for computer memory that everyone is having to pay amid the rush driven by AI.<\/p>\n

More broadly, questions are rising about whether businesses that are spending heavily on AI will end up seeing high-enough profits and productivity to make the investments worth it.<\/p>\n

The AI worries have hit software stocks particularly hard, but they\u2019re spreading to other industries and other markets. For bonds, for example, \u201cAI disruption risk\u201d looks set to knock down prices through this year and into next, even if the threat still looks hazy, according to strategists at UBS.<\/p>\n

\u201cThe timing of AI disruption remains indeterminate, and the fog of uncertainty is unlikely to dissipate quickly,\u201d the strategists led by Matthew Mish wrote in a report.<\/p>\n

They nevertheless expect the AI risk to lead to an increase in defaults in the junk-bond and other low-rated markets. That could hurt even strong, financially stable companies by making it more expensive for them to borrow, including the Big Tech businesses that have been borrowing heavily to pay for their AI investments. That spending has been a major reason the AI frenzy has gotten as big as it has.<\/p>\n

In a less likely but very damaging scenario, such knock-on effects \u201ccould be significant, potentially undercutting capital spending, investment plans, and ultimately the AI boom itself,\u201d according to the UBS strategists.<\/p>\n

In the meantime, some of the companies serving customers with huge AI budgets are benefiting.<\/p>\n

Equinix, for example, jumped 10.9% even though the digital infrastructure company\u2019s results for the latest quarter fell short of analysts\u2019 expectations. It gave financial forecasts for 2026 that topped analysts\u2019 expectations, and CEO Adaire Fox-Martin said that \u201cdemand for our solutions has never been higher.\u201d<\/p>\n

The company\u2019s data centers are helping to power the world\u2019s move into AI.<\/p>\n

Outside of tech, McDonald\u2019s rose 1.9% after reporting a stronger profit <\/a> for the latest quarter than analysts expected. The restaurant chain credited moves to improve its value and affordability, including cutting prices on some U.S. combo meals<\/a> in September.<\/p>\n

Walmart\u2019s rally of 3.6%, meanwhile, was one of the strongest forces pushing upward on the S&P 500. It erased losses from earlier in the week after a report said spending at U.S. retailers overall stalled <\/a> in December.<\/p>\n

In the bond market, Treasury yields fell as investors looked for safer places to park their cash. A report also said slightly more U.S. workers filed for unemployment benefits last week than economists expected.<\/p>\n

Still, the number was lower than the prior week\u2019s<\/a>, which is a signal that the pace of layoffs may be improving. It also followed a surprisingly strong report on the job market <\/a> from Wednesday, which said the nation\u2019s unemployment rate improved last month.<\/p>\n

A strengthening job market could push the Federal Reserve to hold interest rates steady<\/a> and keep its cuts on pause, even if President Donald Trump <\/a> keeps loudly and aggressively calling for lower rates. That\u2019s because lower rates, while giving the economy a boost, can also worsen inflation.<\/p>\n

It all raises the stakes for Friday\u2019s upcoming report on inflation at the U.S. consumer level. Economists expect it to show inflation slowed to 2.5% last month from 2.7% in December.<\/p>\n

A separate report on Thursday said that sales of previously occupied homes slumped last month <\/a> by more than economists expected, which also weighed on yields.<\/p>\n

The yield on the 10-year Treasury fell to 4.10% from 4.18% late Wednesday.<\/p>\n

In stock markets abroad, South Korea\u2019s Kospi rushed 3.1% higher thanks to gains for Samsung Electronics, SK Hynix and other tech stocks. The moves were more modest in other Asian markets and in Europe.<\/p>\n

Hong Kong\u2019s Hang Seng fell 0.9%, and France\u2019s CAC 40 rose 0.3%.<\/p>\n

___<\/p>\n

AP Business Writers Chan Ho-him and Matt Ott contributed.<\/p>\n

Stan Choe, The Associated Press<\/p>\n","protected":false},"excerpt":{"rendered":"NEW YORK (AP) \u2014 U.S. stocks are dropping Thursday as the market punishes companies seen as potential losers…\n","protected":false},"author":2,"featured_media":470937,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[191655,62,276,277,49,48,18130,1660,186919,61],"class_list":{"0":"post-470936","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-adam-foroughi","9":"tag-ai","10":"tag-artificial-intelligence","11":"tag-artificialintelligence","12":"tag-ca","13":"tag-canada","14":"tag-market-sentiment","15":"tag-report","16":"tag-software-companies","17":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/470936","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=470936"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/470936\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/470937"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=470936"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=470936"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=470936"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}