Artificial intelligence (AI) continues to be a key player in financial markets, although initial enthusiasm has given way to growing concern among investors and companies. What once drove the stock market boom now raises doubts about the profitability of massive investments by tech giants, sector agreements, and the disruptive potential of AI, especially in software. Recently, announcements from companies like Anthropic have triggered significant stock market declines, affecting firms such as IBM, Blue Owl, and several insurers. The main fear is that AI could render traditional business models obsolete and lead to the loss of thousands of jobs, along with potential collateral effects. However, Goldman Sachs Research believes these fears may be overstated. While they acknowledge that recent sales reflect expectations of slower revenue and profit growth in software, they think investors are overly generalizing their concerns. Analyst Matthew Martino points out that, although investors are asking the right questions, the fundamentals of companies have not suffered a sharp deterioration. He recommends analyzing the impact of AI on each company individually, as some may even benefit from innovation. The primary concern is that AI agents could become the dominant interface for performing tasks, relegating traditional platforms to a secondary role as mere data repositories. This could weaken their pricing power and strategic relevance, explaining the pressure on their stock prices. Other analysts at Goldman Sachs note that growth expectations for software companies have been reduced. While a revenue growth of 15-20% was previously projected in the medium term, valuations now reflect rates of only 5-10%. Martino emphasizes that the rapid evolution of AI justifies a higher risk premium, but insists that the correction has been too generalized, which could open opportunities in companies with strong fundamentals. To assess the impact of AI, experts suggest analyzing six key factors: the risk of AI agents displacing current platforms, the monetization model (more vulnerable if dependent on users), the role of the registry system, competitive advantage in data and integration, the actual execution capability of AI, and budget alignment, which determines the strategic priority of AI adoption. Goldman Sachs underscores that, in application software, the emergence of AI agents could alter value capture, especially in products with user-based licensing business models. In contrast, in platforms and infrastructures, the need for data management, security, and orchestration remains essential and less susceptible to direct AI disruption. Martino concludes that the question is not whether AI will transform software, but rather identifying where in the value chain it will do so and where it will reinforce existing solutions. Meanwhile, Bret Kenwell, an analyst at eToro, predicts that by 2025, most sectors of the S&P 500 will experience growth, although the energy sector remains uncertain. He highlights that, despite several sectors rising more than 10% this year, the index remains stable due to declines in key sectors like Technology and Finance, leaving software at greater risk of lagging behind. Kenwell observes that industries such as credit card networks, cybersecurity, rating agencies, exchanges, and travel platforms have suffered declines due to fears of AI, although he believes many of these companies are more likely to benefit than be harmed by the adoption of this technology. The analyst warns that, although AI disruption is still more theoretical than real in many cases, the perception of risk can affect long-term valuations, even if businesses are not directly impacted. If concerns persist, investors may be unwilling to pay the same historical valuations, posing an additional challenge for stock price recovery. Source: bolsamania.com