FIrst it was SaaS (in particular, and Software in general), then Private Credit, then Insurance Brokers, then it was financials/brokers that were hammered on Tuesday, then real estate service stocks tumbled yesterday, and today it is the turn of Logistics stocks to plunge as investors followed the bouncing AI disruption ball and freaked out over the sector’s vulnerability to the newest crop of artificial intelligence applications and tools that can disrupt countless industries.

As the brutal "AI Scare Trade" bouncing ball hits yet another sector, we have seen a painful selloff among big trucking stocks such as DSV and Kuehne and Nagel, both of which are down double digits.

The selling is attributed to a 9:15am ET press release from Algorhythm Holdings - a "leading AI technology company" - which announced that its "SemiCab platform in live customer deployments is enabling its customers’ internal operations to scale freight volumes by 300% to 400% without a corresponding increase in operational headcount."

These results, detailed in SemiCab’s recently published industry white paper, demonstrate how the company’s AI-driven Collaborative Transportation Platform is transforming freight management from a labor-intensive, manual process into a highly automated, intelligence-led system. In fact, individual operators using SemiCab have been able to manage more than 2,000 loads annually, compared to the traditional industry benchmark of approximately 500 loads per year per freight broker, demonstrating a 4x improvement in workforce productivity.

“Historically, logistics has been constrained by human bandwidth,” said Gary Atkinson, Chief Executive Officer of Algorhythm Holdings. “Every increase in volume requires more planners, more dispatchers, and more manual intervention. Our SemiCab platform breaks that dependency by embedding intelligence directly into the freight operating system.”

According to the release "the AI-driven leverage of SemiCab’s platform directly supports stronger unit economics and capital efficiency for its customers. As volumes increase, customers benefit from:"

• Lower cost per load;
• Higher asset utilization;
• Reduced administrative overhead; and
• More predictable service levels.

Of course, it is unclear - and will be unclear for months if not years - just how disruptive this AI platform will be to established businesses which have invested billions in established processes, but in keeping with the recent trend of selling (and shorting) potentially affected sectors first, and asking questions much later, the results has been the immediate loss of market cap across the logistics/industrials sector. 

The selling adds to AI disruptions fears already pressuring Software, Games, Private Credit and Real Estate Brokerage names which have all been crushed in recent weeks, and all of which are again underperforming today. 

As Goldman trader Christian DeGrasse writes, "the same exact tape is just repeating itself - almost anything previously tagged by ‘AI-risk’ narrative, whether deemed ‘rational or not’, is underperforming (CRE Brokers, Office REITs, Wealth, Info services, select exchanges, Insurance brokers, payments, Fintech) – while the alts started out somewhat stable but are starting to wobble, as are the banks (which largely have been immune to the ‘scare’ – with superregionals in particular being an attractive hideout within fins .. reach out for people’s views there)"

REITs (especially the large caps) continue to outperform as a hideout zone .. Towers, Datacenters (EQIX Earnings +), Senior Housing in Healthcare, SPG in Malls, WY, Triple nets, etc …

We’re getting lots of requests for color - Nothing ‘new’ is out there in Fins (staying vigilant), but this ‘scare’ does continues to broaden out, with the ‘new sector’ of the day under pressure from fears of AI-competition being logistics/transports in industrial (down double digits as of send).

Names previously thought of as AI winners are getting re-thought and reasessed for potential risks. Valuation and multiples matter too.

Indeed, according to traders, the ongoing "AI scare trade" is weighing on sentiment and has pushed the S&P sharply lower...

... with the associated degrossing now also impacting such AI-immune sectors (one hopes) as gold and silver.

The best recap of what's going on comes from Goldman's Alex Mitola who writes that in terms of Flows, "what has stood out most over the last few days, is NOT heavy supply like price action might suggest, but the COMPLETE LACK OF WILLINGNESS from investors to step in and defend during any of these sharp sell offs."

Until that changes, expect see such sector-specific meltdowns every day, as AI disruption becomes the name of the game.