Software developers, advertising agencies, and investment institutions faced another wave of selling pressure as investors grew increasingly concerned about the business risks posed by advancements in artificial intelligence tools. In European markets, software giant SAP SE declined by 3.4%, hitting a new two-year low; Relx Plc, the parent company of data analytics provider LexisNexis, fell 2.5%; Publicis Groupe, the Rightmove property platform, and EQT Group also experienced significant declines once again. Although the day's losses were narrower than those on Tuesday, persistent worries remained regarding the threats posed by tools released by Anthropic PBC. Recent products such as Claude Code and Cowork further demonstrated that AI has evolved from simple web-based chatbots into algorithmic tools capable of automating a vast number of enterprise workflows. Karen Kharmandarian, a Senior Equity Investment Manager at Mirabaud Investment Managers in Paris, commented, "There is clearly indiscriminate selling across the entire software sector. We are not seeing any clear support levels at the moment; the downward momentum is simply too strong, and it looks somewhat like stop-loss selling is taking over."
To hedge against the disruptive impact of artificial intelligence, investors are instead crowding into companies with physical factories and infrastructure assets. On Wednesday, within the European Stoxx 600 benchmark index, the chemical, telecommunications, and automotive sectors led the gains. Toby Ogg, a European software industry analyst at JPMorgan, noted that despite continuous reductions in holdings over the past 12 to 18 months, investor appetite for the technology sector remains weak. He wrote in a research report, "In the current market environment, the tech sector is not only in a situation of 'guilty until proven innocent' but has effectively moved to 'convicted without a trial.' For software companies, merely 'exceeding earnings expectations' is no longer sufficient to alleviate market concerns."
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