Al Root
Even the most fearful people on Wall Street still see stocks that offer shelter as worry about artificial intelligence sends large chunks of the market tumbling.
Monday was a tough day for the stock market. IBM dropped 13%, while Uber Technologies and DoorDash shares fell 4% and 7%, respectively.
The State Street SPDR S&P Software & Services ETF fell 5% and the Global X FinTech ETF fell 4%. Those losses left those two ETFs down 23% and 27%, respectively, over the past 12 months.
One factor hitting the stocks on Monday was an essay from Citrini Research, published on Sunday, that imagines a future in which AI devastates the economy. It reads a little like the outline of a dystopian science-fiction novel in which AI comes for everyone's job.
No knowledge-based industry is spared. Debt that might go unpaid by software or financial technology companies brings on a financial crisis like the one the world struggled through in 2008 and 2009.
The prospect of high economic growth via AI productivity gains, along with high unemployment, isn't exactly a new idea. Anthropic CEO Darrio Amodei has warned about it in the past, and it was concern about an Anthropic product that sent IBM down on Monday.
Still, the essay seems to have captured Wall Street's imagination, touching on investors' fear about the effects of AI. Most of the many stocks it mentioned tanked on Monday.
GE Vernova was an exception. As a producer of power technology, Vernova is in position to help meet the rising demand for electricity linked to power-hungry AI data centers.
"The equity market still cared less about [jobs data] than it did the news that all of GE Vernova's turbine capacity was now sold out until 2040," reads the essay. Its stock "ambled sideways in a tug of war between negative macro news [and] positive AI infrastructure headlines."
AI needs hardware to function, which is why GE Vernova shares didn't drop with the rest of the market.
GE Vernova isn't the only hardware stock that benefits from the AI buildout. There are dozens that make everything from chips to chip-making machines to servers to connectivity equipment. The list includes Nvidia, Taiwan Semiconductor Manufacturing, ASML, Eaton, Vertiv, Amphenol, and TE Connectivity.
Focusing on AI hardware and the beneficiaries of hyperscalers' estimated $600 billion in 2026 capital spending is one way to insulate a portfolio from AI fears. But there is no perfect way to hedge.
GE Vernova stock, a consensus Buy on Wall Street, trades at 56 times the earnings expected over the next 12 months, up from 45 times a year ago. High valuations bring their own risks to investors.
And it isn't certain that the future will play out as Citrini Research describes it. AI can, in theory, help lower costs and create new jobs. In a best-case scenario, AI would be the steam engine, electricity, or internet of the 21st century.
The difficulty of predicting how things will play out is one reason that the waves of fear striking Wall Street are risking and falling faster than AI technology is actually moving forward.
At a minimum, investors must pay close attention to how AI tools are being deployed across the economy. It is critical to not put too much faith in any one AI-related investment.
GE Vernova stock was 3.7% in midday trading at $862.40, a new 52-week high, while the S&P 500 and Dow Jones Industrial Average were up 0.6% and 0.9%, respectively.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 24, 2026 11:48 ET (16:48 GMT)
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