WHAT PRICE IS RIGHT?

Picking AI's winners and losers isn't an easy game, as the stock market's tech selloff shows

- BY GABRIEL SNYDER

THE STOCK MARKET HAS BEGUN KILLING ITS DARLINGS, SLIDING INTO a brutal selloff that has rippled across the technology sector. Nvidia, the chipmaker synonymous with the AI boom, has shed around 10 percent of its value since its October high and hit a year-to-date low on February 5. Enterprise software stocks have lost roughly $1 trillion in market capitalization since late January, while in early February the Nasdaq was on track for its worst stretch since April. Amazon's stock plunged more than 10 percent in early February after the company forecast $200 billion in capital expenditures for 2026—exceeding Wall Street expectations of roughly $146 billion.

Yet the market has been telling two seemingly incompatible stories about artificial intelligence. The first story is about wasted spending. Four tech giants alone—Alphabet, Meta, Amazon and Microsoft—announced plans to spend around $650 billion on AI infrastructure this year. Amazon's capex bombshell was only the latest. Alphabet said its 2026 spending could reach $185 billion, nearly double last year. Increasing skepticism over whether these colossal outlays will ever earn back their costs has hammered the stocks of the companies making the bets. Oracle, which has taken on roughly $250 billion in long-term data center leasing commitments, has seen its stock cut in half.

But then there was a new story to emerge after Anthropic’s release of new plugins for Claude Cowork—an AI agent capable of automating complex knowledge work in legal, financial and marketing functions—triggered immediate selloffs across enterprise software companies. Asana has shed more two-thirds of its value since its most recent high. Docusign and ServiceNow have each fallen more than half.