This week’s volatility isn’t random.
It’s a repricing event - driven by one force: artificial intelligence (AI).
AI is now disrupting assumptions across multiple sectors at the same time. Software. Financial Services. Real estate. And now transportation.
Business models that looked stable just months ago are suddenly being re-evaluated in real time.
This isn’t panic. It’s recalibration.
And in moments like this, understanding what matters next is far more important than reacting to headlines.
Why Volatility Spiked
After months of relatively smooth index performance, the market was overdue for friction. But this time the catalyst wasn’t inflation or the Fed.
It was uncertainty.
AI is forcing investors to ask tougher questions:
Who truly benefits?Who gets disrupted?Who loses pricing power?
That uncertainty is showing up in sharper intraday swings, sector-specific selloffs, and a widening gap between winners and losers.
Software: Ground Zero
Software stocks have taken the first punch.
For years, SaaS companies were priced on predictable subscription growth and long-duration cash flows. This week, that assumption cracked.
The S&P 500 Software & Services group fell more than 20% below its 200-day moving average, shedding roughly $1 trillion in market value in days.
Even the large-cap leaders weren’t spared in the sell-off.
Investors are now weighing whether AI compresses margins, commoditizes services, or replaces portions of existing software stacks entirely.
The result? Broad selling - even in companies that delivered solid earnings.
The Surprise: Real Estate Services
The bigger shock came outside of tech.
Real estate services stocks were hit hard as investors began pricing in the potential that offices will soon be empty because AI does not need a corner office with a view.
Some analysts are calling it an “AI scare trade.”
Whether that proves justified long term is still an open question.
But the message is clear: AI is no longer a tech-only theme. It’s being priced as a cross-sector disruptor.
What This Means for Investors Right Now
Markets don’t move in straight lines - especially during technological inflection points.
What we’re seeing isn’t collapse. It’s rotation.
Leadership is broadening. Value is re-emerging. Selectivity matters again.
In this kind of environment, flexibility beats prediction.
That’s exactly what I dig into with Paul Schatz in this week’s full Market Insights conversation - where we break down how seasoned investors are navigating this volatility, where opportunity is forming, and what could come next as AI continues to reshape the landscape.
Here’s to your future,
Matt McCall
Founder, NXT Wave Research
