Over the weekend, the AI behemoths like OpenAI and Anthropic expressed concerns about safety. The media added SpaceX’s (SPCX) Elon Musk to those concerned. However, Anthropic is the firm to watch closely. It plans to IPO next month.
The firms wanted the industry to slow its pace of developing AI. This does not mean that companies would slow their purchases of AI hardware. Still, shares of Lumentum (LITE), Corning (GLW) and Coherent (COHR) dropped. Investors anticipated that optical network suppliers would face weaker revenue if AI development slowed.
AI server firms like Dell Technologies (DELL), CoreWeave (CRWV), and Nebius (NBIS) faced selling pressure. Hewlett Packard Enterprise (HPE) stock lost 11% on Monday.
Unusually, cybersecurity stocks rose. CrowdStrike (CRWD) jumped by 13.85%, Zscaler (ZS) added 16.5%, and Palo Alto Networks (PANW) rose by 13%.
Software stocks rallied. Salesforce (CRM), ServiceNow (NOW), Adobe (ADBE), Autodesk (ADSK), and Workday (WDAY) are examples of stocks rising on the day. Readers will remember that the rally in software stocks and drop in chip stocks happened before.
Traders are recycling the playbook of rotating out of semiconductors and buying software stocks. An existential risk remains for software firms. AI is well-suited to write mobile apps and software solutions. AI agents will give corporations automation solutions. As a result, they may cut technology staff and software subscriptions.
