As the market digests another AI scare, we would suggest staying out of the fight. Other sectors and companies are proving resilient while tech sells off; stick with stocks toughing it out until the tech dust settles.
The market is certainly nervous this won’t end well. After falling for several days, the S&P 500 is down nearly 1% for the year. The Nasdaq Composite Index is off 3%, as companies like Microsoft and Nvidia drag it down. The CBOE Volatility Index or VIX—the market’s “fear gauge”—has spiked, though it’s still low compared to last April’s “Liberation Day” panic.
The problem isn’t earnings, which have been strong. Rather, investors are fretting over AI’s destructive potential. Tools like Anthropic’s Claude Opus 4.6 are threatening things like enterprise software, consulting, data analytics, and legal services. The fear is that it’s only the beginning.
Two stocks that look attractive, for instance, are JPMorgan Chase and Taiwan Semiconductor, says Will McGough, chief investment officer at Prime Capital Financial. JPMorgan and other banks should benefit from steeper yield curve that increases profit margins, he says, They should also benefit from a pickup in mergers and acquisitions.
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