AI Fears May Be Overblown in the Short Term, but That Doesn’t Mean There Isn’t Risk Ahead

On the Feb. 23 episode of The Morning Filter_, _David Sekeraand Susan Dziubinski talk about whether current AI fears are justified, which industries might be most at risk from AI’s exponential growth, and how to find opportunities during this AI selloff. Here is an excerpt from the episode.

Why AI Fears Are Overblown Despite Selloffs

**Susan Dziubinski: **We’ve experienced a lot of market volatility during the past couple weeks tied to AI fears. And when you and I last talked, software stocks were getting hammered, then those AI fears sort of cascaded over to financial-services stocks. We even saw some trucking and logistics companies get hit. So, are all of these AI fears overblown?

**David Sekera: **According to our existing base case by our technology team, and really even coming from a lot of our other sector directors, I would say, yes, our base case is that a lot of these AI fears are overblown here in the short term. Although I still think you have to acknowledge Dan Romanoff, the director who covers Microsoft MSFT and a lot of those software stocks, still would admit the ultimate impact on a lot of these companies and a lot of these stocks is to some degree unknowable. And I think that’s why we’ve seen the prolonged selloff in the software stocks. Those started selling off at least a year ago, if not even a little bit longer. And why we’ve seen these sharp selloffs more recently in some of the other sectors. At the end of the day, the market is just trying to answer the question, what services and products will be able to be replaced by artificial intelligence? And so that’s why we’ve had this rotating target of industries getting hit with these sharp selloffs, just as people are trying to figure out who could be at risk. At this point, though, taking a look at a lot of these selloffs, I think it’s just much more about fear and uncertainty than it is really based on a rigorous analysis of who actually really is subject to that kind of risk.

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In Which Industries Does AI Pose the Biggest Threat?

**Dziubinski: **Dave, are there any industries that have gotten sold off that, in your mind, deserved to be sold off? Or, put another way, is that AI threat real for some industries more than others at this point? Or are we just seeing sort of indiscriminate selling?

**Sekera: **It’snot indiscriminate. It’s definitely going to be a real threat to some industries and sectors. But I’d say to some degree, we don’t really know exactly what the end cases of AI are going to be, and we don’t know exactly how and when it’s going to be implemented. So I think from your own point of view, you just kind of really need to sit and think about who is most at risk here. And I’d look for those that have characteristics where I’d say it’s probably easier to replace services that don’t require interpersonal dynamics, those that you don’t want to have that human interaction. Anything where you have high volumes of repetitive, data-driven, or rules-based tasks. Things like data entry, clerking, processing, accounting roles, things like that. And then we’re also seeing a big focus on content creation.

In our view, we think that low-end production can certainly be moved to artificial intelligence. But where you want to have originality, you want to have a lot of context, that isn’t something that is going to be able to get moved to AI anytime soon. You mentioned a couple of different examples, like trucking and logistics. This is one where we think, at the end of the day, you still need transportation companies. You still have to have trucking in order to move goods from here to there. Over time, that probably gets augmented with self-driving trucks in order to make it more efficient. Whereas something like the logistics part, I think really, that could be replaced by artificial intelligence and used within those trucking companies as they move things around.

The wealth management stocks, they all sold off pretty hard. I think that’s actually a good opportunity for investors right now. I mean, if you think about it, we’ve already had robo-advisors out there for at least the past decade. But at the end of the day, I think people want that human relationship with their investment manager when it comes to money. Another one you mentioned was the insurance brokers, that those all got hit. This is a sector where I think the analysis part of that business would be augmented by AI, as opposed to being, you know, completely replaced by it. But again, it’s another area, you probably need fewer people to do that analysis, because they’ll be more productive using artificial intelligence. But it’s still a relationship business, you still need human consulting with clients, you still need the ability to work out different types of issues on a human-to-human basis. So, that’s another one where I think it gets more efficient over time but not necessarily replaced.

How to Find Software Companies That Can Withstand AI’s Growth

**Dziubinski: **Dave, let’s say I’m an investor who wants to sort of suss out the compelling investment opportunities in this AI selloff. What should I be looking for if I’m trying to figure out whether a company will be disrupted by AI in a positive or in a negative way?

**Sekera: **The way that we’re thinking about it here in the equity research group is overall, from that thematic point of view, we’re looking for where AI augments businesses as opposed to replacing businesses. And so, if you think about our investment thesis for the software sector, we think that those companies will end up incorporating artificial intelligence into their products and services. That then adds more economic value to their individual clients, as opposed to clients trying to be able to recreate those entire software platforms on their own.

For something like software, I think there’s still economies of scale, specific specialization that adds a lot more value in those products than just the underlying raw coding those platforms. So I’d say, if you’re looking at the software sector, with as much as a lot of those stocks have sold off, Dan Romanoff, who covers these names for us, specifically said to look for those that have the most complex and complicated software and platform. Software that has the most touch points across the individual clients’ businesses. Those are their most embedded into their day-to-day operations. And then those software companies that have a wide or a narrow economic moat, specifically those that we think have a network effect across clients. And lastly, those that we think are just most risky to businesses to try and replace and put in their own. So, really, I don’t know. I mean, businesses that require human relationships, require judgment, require negotiation. Businesses that are more unpredictable are going to be the ones that would be hardest at the end of the day to replace with AI.

Subscribe to The Morning Filter on Apple Podcasts_, or wherever you get your podcasts, and keep up with the latest research from hosts Susan Dziubinski and David Sekera on Morningstar.com._

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			39m 52s
		 Feb 23, 2026

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