By Tae Kim
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Last Dance. Hi everyone. One year ago, panic around DeepSeek's AI models, led to indiscriminate selling of technology stocks. Experts said the Chinese model was so efficient it would lead to an AI computing glut. The fears proved exaggerated and stocks recovered.
Now it's happening again. Investors are panicking that advances in AI will disrupt nearly all software and information services businesses. On Tuesday, dozens of stocks in those sectors plunged, including legal software owner Thomson Reuters and RELX, owner of the LexisNexis legal database. The selling came after Anthropic introduced a legal plugin tool for its AI platform that enables automation for some legal tasks such as reviewing contracts.
Days like these are why long-term lessons matter. Over time, investors are best served holding steady through volatility and thinking longer term amid the market's tendency to overreact.
Those are lessons I've learned again and again as a Barron's columnist. I've found myself contemplating those points, as I wrap up my second stint at Barron's. Yes, unfortunately, it's time for me to say farewell. I loved covering technology and interacting with many of you. If I played a small part in helping you make better financial decisions, I'm grateful.
Starting next week, I will depart to focus on writing my second book. While I'm not ready to reveal the subject, I'm incredibly excited about the topic. Thank you for trusting me with your time and attention. It's been an honor and a privilege.
At Barron's, you are in very good hands. My colleagues, who have helped me keep this newsletter going and whose links often fill the page, will be helming Barron's Tech from here.
Before I go, though, I'd like to leave you with the four tech investing rules that have guided my newsletter writing:
Take the Long View. It's easy to panic and get caught up in fear and uncertainty during selloffs like last year's DeepSeek scare and the current software rout. But it's important to filter out macro events, short-term headlines, and stock price volatility. The reality is that stocks don't go up 1% or 2% every day; volatility is part of markets. Investing in stocks requires getting comfortable with big moves, up or down.
It's best to take a step back and calmly assess the underlying fundamentals of a business. Peter Lynch once said that in the long run there is a 100% correlation between the success of a business -- his definition was durable earnings growth -- and the success of its stock. If the fundamentals are still sound, things will work themselves out.
Do Your Own Work. Investors tend to panic sell at the worst possible times because they rely on others for their stock tips. It's important to do your own research and internalize why you own a stock. The market will test your conviction. You have to trust your own judgment. Doing the work will give you confidence to ride out volatility. As a reader of Barron's you're off to a good start, but you still need to do your own research and know why you own a stock.
Micro Over Macro. While it's tempting to figure out every zig and zag from macro developments such as interest rates or tariffs, I've found that time is better spent focusing on company-specific fundamentals and finding the next big product cycle. The technology sector is so dynamic that winners emerge even during recessions. History is littered with examples. Nvidia shares doubled during the heart of the dot-com meltdown. Apple launched the iPhone in June 2007 just as the economy slipped into the Great Financial Crisis. The iPhone maker's shares nearly quintupled in the five years after the launch even as the S&P 500 fell.
Sit and Hold. If you've found a great company, buy the stock and hold for the long term. Don't be clever and trade out of positions around short-term issues. The big money is made riding the winners over multiyear periods. Winning companies tend to keep winning. Not only is it tax efficient, but it also leads to better returns.
Thank you again. I'll see you on the internet.
This Week in Barron's Tech
-- Software and Legal Services Get Crushed. AI Panic Hits the Market.
-- SMCI Stock Rallies 16% as AI Boom Boosts Earnings
-- SpaceX Is Becoming a Trillion-Dollar AI Company
-- Oracle to Raise Up to $50 Billion. What It Means for the Stock.
-- Silicon Labs Stock Soars. Why Texas Instruments Is Paying a Big Premium
for Acquisition.
Write to Tae Kim at tae.kim@barrons.com or follow him on X at @firstadopter.
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February 04, 2026 15:40 ET (20:40 GMT)
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