AI Fear Crushes Traditional Stocks as the S&P 500 Hits Highs

The stock market in 2026 presents a strange split. While the S&P 500 has climbed 8.28% this year, ten specific companies have seen their valuations collapse by more than 40%. Investors are aggressively backing AI technology while simultaneously selling off anything they fear might become obsolete due to automation.

Software and consulting firms are taking the biggest hit. Intuit, which owns TurboTax, is down 55% as cheap AI tax tools disrupt its business model. Similarly, consulting giant Accenture is down 45% because clients are choosing to spend their budgets on AI tools instead of hiring traditional human consultants. Companies like Cognizant, Gartner, and The Trade Desk have faced similar selloffs as markets adjust to this new reality.

However, not every decline is caused by AI fears. CoStar Group, the worst performer of the year with a 58% drop, is struggling due to heavy spending on its Homes.com platform. Investors grew impatient with the long path to profitability, causing the stock to crash. Boston Scientific has also dropped 53% after cutting its growth forecasts and managing a major product recall.

As capital leaves these sectors, it is flowing heavily into chip and memory manufacturers. Companies like Dell and Micron have seen massive gains this year as the market shifts toward the hardware powering AI development. Investors should watch the upcoming earnings reports for CoStar and Boston Scientific to see if these companies can regain market confidence or if the selloff will continue.