The worry has also spread to companies that offer research insights and IT consultancy services, such as Gartner Inc, which reduced its full-year outlook last week. While the firm cited factors like tariffs and government budget cuts, analysts said the weak result exacerbated concerns over competition from AI research tools.
Still, some see buying opportunities following the rapid price drops. Morgan Stanley analyst Josh Baer raised his rating on Monday.com to overweight on Tuesday, saying the stock’s pullback “more than incorporates” risks of AI disrupting search advertising and performance marketing.
“Investors are fearing that AI is going to eat software and multiples are going to fall apart,” Jefferies analyst Brent Thill said in a CNBC interview on Monday. “I think the fear is overblown, but nevertheless we are living through a period right now where investors just really don’t care about the group.”
