AI Isn't Disrupting This Part of the Market… Yet
The Weekend Edition is pulled from the daily Stansberry Digest.
No matter what happens next, "AI disruption" will be one of the stories of 2026...
Companies like OpenAI and Anthropic are making rapid advances in AI technology. And the companies providing their chips, data centers, and energy are right behind.
Meanwhile, AI also has a huge impact on industries and jobs that the technology could reshape.
This is by no means a new story... or an unpredictable consequence of any emerging technology. We've been writing for years that there will be eventual "winners" and "losers" from AI.
But only recently has that sentiment shown up in an obvious series of wild stock moves...
So far in 2026, one sector at a time, AI is disrupting the stock market, swiftly and significantly.
Even the private-equity sector is getting caught up in this turn of fortunes. Software firms CrowdStrike (CRWD) and International Business Machines (IBM) were the two latest "victims," each losing 10% or more in a day following new tool releases from Anthropic that could shake up entire existing business models.
The software industry is the poster child...
Folks are calling it the "SaaSpocalypse," referring to AI upending the Software as a Service ("SaaS") businesses that have thrived in recent decades.
For example, advertising platform AppLovin (APP) has fallen nearly 40% from its December high. And tax-software firm Intuit (INTU) has plummeted 51% from its recent high in July.
But this kind of market behavior also has the hallmarks of panic selling. We're not here to tell you that AI won't force dramatic changes in companies... or that AI-driven concerns won't lead to more selling in broad sectors and individual stocks.
It just means that this intense selling could be overblown, or closer to the end than the beginning.
Nobody knows yet whether this market action is misguided or completely appropriate. We suspect it's somewhere in the middle, though that idea doesn't make for attractive headlines.
The reality is that right now, certain stocks have been hit hard in the AI trade.
Yet here's what we want to highlight today: Another large, and critically important, part of the market isn't signaling that anything is wrong at all.
Bonds Are Holding Steady
The bond market doesn't believe in the "SaaSpocalypse"...
As our colleague Mike DiBiase wrote in the February 18 issue of Stansberry's Credit Opportunities, software companies' bonds haven't suffered the same fate as their stock prices. From Mike...
Every month, we scour through thousands of corporate bonds looking for outliers... bonds that are yielding far more than they should given their level of risk. We thought we'd find a few software-bond bargains.
But that wasn't the case.
As a reminder, a bond is a company's debt. As long as a company is healthy enough to pay its debt, bondholders can collect interest and principal on their investments. But bonds can drop in price if the market thinks the company might be unable to meet its financial obligations.
Bonds of software businesses have held steady, and Mike says the bond market doesn't think any SaaS companies are in "immediate danger of bankruptcy."
If there were a true imminent disruption, bondholders would've run for the hills just like stockholders did. But instead, the opposite happened. More from Mike...
In fact, the vast majority of software companies saw their bond prices increase. And for those whose prices fell, the decreases were tiny. There wasn't a single software bond that even approached what we would call an outlier.
AI will likely force some software companies out of business. It just may take a while for that to happen – longer than a few weeks.
As Bank of America Global Research showed in a recent note, it took nearly 10 years for movie-rental chain Blockbuster to declare bankruptcy after streaming giant Netflix (NFLX) went public in 2001...
We'll likely see a lot more of these charts in the coming years as AI does disrupt software and other companies. But the winners and losers are yet to be decided. Some companies will successfully adapt to a world with AI, and some won't.
In the meantime, investors aren't taking any chances. They're dumping the entire sector. And in times like these, it's possible that selling will expand to other sectors.
As Ten Stock Trader editor Greg Diamond wrote on Tuesday, one reason is found on Wall Street...
With some important stocks starting to fall, the big funds out there would be forced to manage risk and sell. If the selling becomes broad enough, these funds wouldn't be concerned with the long-term fundamental picture of their investments.
They'd be concerned with their annual performance.
Managing their risk becomes the priority. I've been a part of that world, and it happens a lot. Something to keep in mind over the next weeks – what it means if the selling intensifies.
So don't be surprised by more volatility ahead. At the same time, this can eventually be an opportunity. And the stock market overall is holding up.
The equal-weight S&P 500 Index keeps hitting new all-time highs, and even the standard market-cap-weighted benchmark S&P 500 isn't far from its record set last month.
The credit market doesn't see any risk in the broader market, either...
That's based on high-yield credit spreads, which are still at historically low levels. That's a good sign. As Mike wrote...
The U.S. high-yield credit spread (the difference between the average yield on high-yield bonds and the yield of similar-duration "risk free" U.S. Treasurys) increased from around 275 basis points ("bps") last month to 292 bps this month.
The last time we saw high-yield credit spreads widen was during the "tariff tantrum" last spring. They spiked to more than 450 bps in April, the highest in nearly two years. But that's still short of the 550 bps level that Mike said could trigger the next credit crisis.
Plus, spreads quickly came back down last spring. They remain at multidecade lows below 300 basis points. Low spreads indicate complacency from investors. It shows that they aren't requiring a much higher return for taking on risky junk bonds.
That doesn't mean folks' concerns about the economy and market are without merit. There are risks out there... Inflation and "unaffordability," cracks in the job market and "frozen" hiring, and consumer-debt troubles all signal that not all is well in the economy.
Also, keep in mind an important distinction between bond investors and stock investors... Bond investors still pocket their maximum gains unless a company defaults on its debt obligations, and they have legal protections that shareholders don't. An overvalued stock doesn't need a default for its share price to crash.
Still, the credit market is the lifeblood of the economy. And bond investors aren't concerned about a widespread crisis. That's still meaningful in the face of this year's "AI sell-offs."
So, take this selling for what it is – right now, at least. It's a story we're telling in 2026, but it's not the only one.
Good investing,
Corey McLaughlin and Nick Koziol
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