U.S. stocks drop as investors hunt for potential losers from AI

U.S. stocks are dropping Thursday as the market splits further between perceived losers and winners from the rush into artificial-intelligence technology.

The S&P 500 fell 1.1 per cent after erasing an early gain that brought it near its all-time high. The Dow Jones Industrial Average was down 472 points, or 0.9 per cent, as of 2:20 p.m. Eastern time, and the Nasdaq composite was 1.7 per cent lower.

AppLovin tumbled 18.3 per cent despite reporting a stronger profit for the latest quarter than analysts expected. Like other software companies, it’s come under pressure recently from worries that AI may undercut its business while fundamentally changing how people use the internet.

AppLovin CEO Adam Foroughi pushed back on the concerns, saying in a conference call with analysts that indicators show his company is doing well. “There’s a real disconnect between market sentiment and the reality of our business,” he said.

Its stock nevertheless increased its loss for the young year so far, which came into the day at 32.2 per cent.

Cisco Systems dropped 11.6 per cent despite likewise topping analysts’ expectations for profit and revenue last quarter. The tech giant indicated that it may make less profit off each $1 of revenue during the current quarter than it did in the past quarter.