Software stocks have been pummeled over artificial intelligence fears in recent weeks.
Now, investors can add logistics and freight names to the list of stocks getting sold on worries about AI.
Shares of logistics and freight operations companies C.H. Robinson (CHRW) and Universal Logistics (ULH) suffered double-digit losses on Thursday after a little-known Florida company announced a new tool that would scale freight volumes without increasing headcount.
Algorhythm Holdings (RIME) announced on Thursday that its platform is “transforming freight management from a labor-intensive, manual process into a highly automated, intelligence-led system” that’s driving a “4x improvement in workforce productivity.”
The company’s shares surged by as much as 79% on the news before closing up 29%. Until the third quarter of 2025, the company operated a karaoke machine business that it sold to Stingray Group (STGYF) before pivoting to AI-driven freight solutions. At the close, Algorhythm’s market cap remained below $10 million.
“The glaring theme underneath the surface for not just Tech, but for every corner of the market right now is an aggressive shoot 1st ask questions later for any area of the market that has an AI headline,” Jefferies analyst Jeff Favuzza wrote to clients on Feb. 12.
“[I] wish we had a great answer for when this stops / what the catalyst is,” Favuzza added.
The swings across the logistics space — even on news as unexpected as Algorhythm’s announcement — also pushed shares of industry giants like Maersk (MAERSK-B.CO) and UPS (UPS) lower, though by smaller percentages. Shares of another logistics company, Hub Group (HUBG), fell by around 6%.
“Capital markets have faced quite an array of moving pieces over the last couple of weeks,” LPL Financial chief equity strategist Jeff Buchbinder said in emailed commentary. He rattled off a list of factors from “equity market rotation dynamics, volatile metals and commodity price action” to “geopolitical flare-ups, global central bank decisions, and high-profile earnings.”
Thursday’s drop in logistics names came after financial services stocks, including Charles Schwab (SCHW) and Raymond James (RJF), and real estate names like Compass (COMP) and Jones Lang LaSalle (JLL) fell after another little-known company, Altruist, launched an AI-driven tax software.
And the software selling continues too: AppLovin (APP) stock fell by 19% on Thursday, even after the company’s results on Wednesday beat analyst expectations on both adjusted earnings per share and top-line revenue while executives attempted to spin AI as a positive catalyst for the stock.
The major averages were under pressure Thursday, as the tech-heavy Nasdaq Composite (^IXIC) lost 2% and the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) shed roughly 1.5% and 1.3%, respectively. But these rolling sector sell-offs have, to date, largely been confined to the stock market and have not appeared to influence discussions about where monetary policy could be headed next.
Should the market turmoil continue, though, that could change.
If the fear-based investor sentiment continues, Macquarie global strategist Thierry Wizman wrote in a note to clients on Thursday, AI could begin to seriously weigh on the Federal Reserve. While monetary hawks on the Fed may look at sticky inflation and a healthier job market as reasons to raise rates, doves may want to “run the economy hot” to push for productivity gains and offset fears of AI’s job replacement and displacement.
“The ‘AI scare trade’ that was first felt last week is still keeping traders away from extending risk in US stocks too much,” Wizman wrote. “If the ‘AI scare’ sinks sentiment further, the ‘burden of proof’ may soon rest with the hawks to justify why policy shouldn’t ease.”
The AI threat is also materializing in companies’ financial disclosures.
Nearly three-quarters of the companies that make up the S&P 500 flagged AI as a material risk in filings, up from just 12% in 2023, according to a study by the Conference Board conducted in October.
The shift underscores “how rapidly AI has moved from experimental pilots to business-critical systems, and how urgently boards and executives are bracing for reputational, regulatory, and operational risks,” the Conference Board said in a statement about the findings.
Investors are hunting for any sign of weakness in sector after sector as fears continue to coalesce around the idea that rapidly advancing AI models will disrupt a large swath of the economy, UBS strategist Matthew Mish wrote in a recent client note.
“The AI disruption led selloff in February” has been “driven by the legitimate belief that AI driven change is coming faster not only to software, but to many other sectors,” Mish wrote.
“The timing of AI disruption remains indeterminate, and the fog of uncertainty is unlikely to dissipate quickly.”
