Check the jukebox, because the same song seems to be stuck on repeat. Fears of disruption by artificial intelligence keep crashing different areas of the market and while trucking and transport stocks are the latest victims, it’s a sign of a wider nervousness about stretched valuations.
Investors in logistics companies might have been surprised to see the sector tank on Thursday due to a company previously known for selling karaoke equipment. Algorhythm Holdings—formerly the Singing Machine Co.—published a white paper claiming its AI technology could make trucking more efficient. That was enough to wipe billions of dollars off companies like freight broker C.H. Robinson Worldwide.
That doesn’t make a lot of sense. Algorhythm had less than $2 million in sales for its most recently reported quarter and is a way off revolutionizing transport. But after AI advances drove up valuations in various sectors, the threat of disruption is an excuse to take profit and rotate to other areas of the market. C.H. Robinson is one such example—after spending years in a narrow trading range, it essentially doubled in a period of six months from the summer of 2025 to hit an all-time high last week, partly due to hopes about AI-driven efficiencies. That means it was vulnerable to a selloff.
The abrupt flip from perceived AI winner to AI loser is hitting bigger stocks too. The
Roundhill Magnificent Seven ETF, which tracks the so-called ‘Mag 7’ large technology companies, closed in correction territory on Thursday, down nearly 11% from its high in late October. The group has gone from all being seen as beneficiaries of AI, to a period when there was a split—some gained such as Google-parent Alphabet, while Amazon.com and Microsoft entered bear markets, defined as a 20% drawdown from recent highs. Now they are trading in lockstep again as they head downward.
But volatile reversals shouldn’t be taken as a sign of an inevitable dot-com style bubble bursting. The S&P 500 is still just over 2% below its record closing high reached a couple of weeks ago. The Federal Reserve is expected to eventually resume interest-rate cuts, which should provide some relief to the large tech stocks.
Right now the mood music around AI is all about the problems it will cause for the market. But investors should expect the tune to change eventually.
—Adam Clark
***Get more of the journalism you love. Choose Barron’s as a preferred source in Google.
|
CONTENT FROM: GE VERNOVA
|
Substantial Opportunity Ahead—It’s Just the Start
|
.png)
|
|
GE Vernova’s platform of solutions is well-positioned to serve the growing, long-cycle electric power market. In 2025, the company delivered strong performance with significant orders and backlog growth, margin expansion and cash generation.
Learn More
|
|
|
Trump Revokes Obama-Era Environmental Regulations
President Donald Trump revoked the Environmental Protection Agency’s landmark 2009 endangerment finding that serves as the key basis for U.S. climate rules, including vehicle emissions standards under the Clean Air Act. He said the stricter standards for oil and gas were onerous for auto makers and raised vehicle prices.
- Repealing the scientific finding means the EPA will no longer regulate greenhouse gas emissions from U.S. vehicles. It also guts regulations for other industries, such as fuel-fired power plants and oil and gas facilities, according to the Environmental & Energy Law Program at Harvard Law School.
- Scientists have determined that six environmental gases contribute to poorer air quality, rising temperatures, extreme weather events, and risks to public health, agriculture, and infrastructure. The Supreme Court ruled in 2007 that greenhouse gases are pollutants subject to the Clean Air Act.
- Thursday’s move could mean a renewed focus on less energy-efficient but more profitable bigger vehicles, especially for General Motors, Ford Motor, and Stellantis North America, which are major sellers of trucks and SUVs, said Morningstar analyst David Whiston. Auto makers no longer need to run money-losing EV
businesses.
- Tesla has long collected emissions credits from its EVs and sold them on the secondary market, creating a high-margin business.
Automotive regulatory credits—some of which aren't greenhouse-gas credits—contributed about $2 billion to Tesla’s $94.8 billion in revenue in 2025.
What’s Next: Coal and gas providers could also face fewer federal legal restrictions and compliance costs, said Tim Winter, a portfolio manager at Gabelli Funds. That means utility companies will be able to keep existing plants operating
as a bridge until replacement capacity is built, Winter added.
—Nate Wolf and Janet H. Cho
DraftKings Plans Steep 2026 Spending on Prediction
Markets
DraftKings plans steep spending this year on building its prediction markets capabilities, where co-founder and CEO Jason Robins sees a “massive, incremental opportunity.” To do that, it is going to use growth capital. Its profit guidance for this year, which is below analysts’ forecast, reflects this spending.
- The mobile betting app projects a 2026 revenue guidance range of $6.5 billion to $6.9 billion and adjusted earnings before interest, taxes, depreciation, and amortization of $700 million to $900 million. Analysts had expected Ebitda earnings of $981 million.
- DraftKings missed Wall Street’s fourth
