The rise of Artificial Intelligence hasn’t just shaken up technology — it’s redrawn the entire map of the stock market.
Some companies are skyrocketing to record highs, while others are finding themselves left behind.
The divide has become more noticeable over the past year, as investors shift their money toward AI winners and pull away from businesses seen as vulnerable.
The Giants Leading the Pack
Nvidia has become the poster child of the AI era, with its chips powering the language models behind the boom.
The company’s valuation has soared to over $4 trillion, cementing its dominance.
Big players like Meta, Microsoft, and Oracle are also riding this wave, locked in a race to develop and expand AI tools.
Stocks Struggling in AI’s Shadow
But while some stocks are thriving, others are being pushed out of the spotlight.
Back in 2023, Bank of America created a basket of companies that looked especially at risk from AI disruption.
The warning signs were right: Bloomberg data shows that since May, this group has underperformed the S&P 500 by about 22 percentage points.
Creative Tools Facing a Shake-Up
Shutterstock and Adobe, once steady names in digital content, have taken major hits.
Shutterstock’s stock has fallen more than 27% in the past year, while Adobe is down over 20%.
Why? Investors believe AI-generated images and marketing campaigns are going to eat into demand for traditional design tools.
Coca-Cola even proved the point by releasing an AI-generated holiday ad last year.
Language Learning Under Pressure
Duolingo’s playful green owl may still be popular, with over 10 million paying users, but the company’s stock has slipped 13%.
Even its announcement of becoming “AI first” sparked a backlash.
On top of that, Apple’s new headphones, which can translate languages in real time, have investors worried about Duolingo’s future relevance.
Web and Hosting Services Struggle Too
Companies like Wix and GoDaddy, which help customers build websites and manage domains, have also been caught in the crossfire.
Wix is down 17%, while GoDaddy has dropped more than 27% in the past year.
Both have faced weak performance as AI tools increasingly make tasks like web design easier.
Recruiting and Staffing Firms Hit Hardest
Perhaps no industry has been hit as hard as recruitment and HR consulting.
Robert Half’s stock has nearly halved in value over the past year, while Manpower Group is down over 33%.
With AI automating tasks like scheduling, customer service, and even candidate screening, investors are nervous about the long-term future of these businesses.
Freelance Platforms Losing Ground
Fiverr, the online marketplace for freelance services, has also seen confidence shaken.
Its stock has plunged almost 27% as buyers experiment with AI to generate content, design, and even code — tasks freelancers once dominated.
Experts See a Big Shift Ahead
According to Daniel Newman of the Futurum Group, industries like consulting, marketing, and research are “highly vulnerable” to AI.
Even software engineering is being disrupted, as big tech leans on AI to generate code and cut back on hiring.
The disruption is fast, and while new roles may eventually emerge, it’s unclear what they’ll look like.
Not Everyone Is Losing
Despite the risks, some of the companies once seen as vulnerable have instead flourished.
Alphabet, Google’s parent company, is now worth more than $3 trillion, with its stock up nearly 33% in a year thanks to AI-driven demand.
Nvidia, Microsoft, and other mega-cap firms have shown that when AI meets profitability, the results can be staggering.
Echoes of the Dot-Com Bubble
Still, not everyone is convinced this boom will last forever.
Steve Sosnick of Interactive Brokers warns that the AI trade is “crowded” and vulnerable to shocks — comparing it to the dot-com bubble of the late 1990s.
The difference this time, however, is that today’s AI leaders like Microsoft and Nvidia are cash-generating powerhouses, not speculative startups.
What’s Next for Investors?
For now, investors are driven by both momentum and fear of missing out.
Institutional investors especially can’t afford to ignore the runaway success of AI stocks.
But the question remains: is this growth sustainable, or are we headed for another market correction?
AI may be unlocking trillions in value today, but the real test will be whether the companies riding the wave can keep delivering in the years to come.