Thomson Reuters Shares Drop Amid AI Concerns in Software and Advertising Stocks
A significant selloff took place in the software and advertising sectors on Tuesday, primarily driven by rising concerns surrounding artificial intelligence (AI) models. This decline has particularly affected companies that were initially viewed as potential beneficiaries of AI advancements.
Impact of AI Developments on Software and Advertising Stocks
The launch of Anthropic’s legal plug-in for its Claude generative AI chatbot emerged as a major trigger for this downturn. As a result, notable legal analytics companies faced substantial stock price drops. For instance, Britain’s RELX decreased by nearly 17%, while the Netherlands’ Wolters Kluwer dropped 13%. Furthermore, Toronto-based Thomson Reuters (TRI) saw a decline of over 14%.
Market Reactions and Concerns
Investors are now questioning the profitability of their AI investments. Lars Skovgaard, a senior investment strategist at Danske Bank, remarked, “The software companies were assumed to be winners from AI, but there’s a growing fear of being outsmarted by rapid updates.”
Noteworthy Stock Performances
- RELX shares have halved in value since their peak in February.
- This drop represents RELX’s largest decline since 1988.
- Germany’s SAP, once Europe’s most valuable company, fell over 16% last week after an unfavorable cloud revenue forecast.
- SAP’s shares are now down more than 41% from their 2025 highs.
Giuseppe Sersale, a fund manager at Anthilia, noted that AI is increasingly capable of delivering the programming and knowledge-based services that these software models rely on, contributing to ongoing pressure in the sector.
Declining Values Across Major Companies
Software and cloud computing stocks in the U.S. also experienced declines. Microsoft and Oracle saw drops of 2% and 3%, respectively. Similarly, Salesforce, ServiceNow, and Adobe all fell by over 5% in early trading.
Further Declines in the Advertising Sector
In addition, advertising agencies were significantly impacted. France’s Publicis, the world’s largest advertising group by market capitalization, reported a decline of over 9% following its earnings results. In the U.S., Omnicom fell nearly 6% as concerns grew over their exposure to AI developments.
- Publicis plans to invest approximately €900 million (around US$1.06 billion) in AI-driven technologies and data assets by 2026.
- A Barclays survey revealed that advertising agencies are perceived as highly vulnerable to AI, with WPP, Omnicom, and Publicis labeled as potential “AI losers.”
Analysts suggested that the best route for these companies to dispel the “AI loser” label is to innovate and promote AI-based revenue-generating products effectively.
Other advertising-dependent firms were also affected, with Pinterest and Snap experiencing declines of 4% and over 5%, respectively. Interestingly, major tech players like Meta and Alphabet’s Google saw only marginal declines.
