Fears of artificial intelligence-driven disruption rippled through Wall Street again, triggering a sharp selloff across software, payments, logistics, and legacy tech names. International Business Machines Corp. posted its steepest one-day decline in 25 years as investors reacted to a confluence of speculative research, emerging AI capabilities, and growing anxiety over structural displacement. The episode underscores how fragile sentiment has become in a market already wrestling with geopolitical risk and valuation compression.

From Hypothetical Scenario to Market Shock

The latest wave of volatility began after Citrini Research circulated a weekend report outlining a hypothetical 2028 scenario in which advanced AI systems trigger widespread white-collar unemployment, falling consumer demand, loan defaults, and economic contraction. Although the report explicitly described itself as a thought exercise rather than a prediction, its narrative resonated with an already jittery market.

Compounding the pressure, AI startup Anthropic announced that its Claude Code tool can assist in modernizing COBOL — a decades-old programming language deeply embedded in IBM’s legacy systems. The implication that AI could reduce dependence on traditional enterprise infrastructure amplified concerns about IBM’s long-term competitive moat.

The reaction was swift. Shares of delivery platforms, payment processors, and software firms fell sharply, as investors extrapolated disruption risks across multiple industries.

Payments, Delivery and “Agentic Commerce” Fears

Among the most controversial elements of the scenario was the suggestion that AI agents could eliminate transaction fees by bypassing traditional payment networks such as Visa and Mastercard. The concept of “agentic commerce” — where autonomous AI systems optimize consumer spending decisions — challenges the economics of fee-based platforms.

Delivery services such as DoorDash and Uber Eats were also cited as vulnerable to AI-powered alternatives built on streamlined, lower-cost infrastructure. Even if such outcomes remain speculative, the speed at which investors repriced these business models highlights how quickly narratives can shift in high-multiple sectors.

The broader market has increasingly moved into a “shoot first, ask questions later” posture when it comes to AI disruption. Software, insurance brokers, private credit firms, cybersecurity providers, and real estate service stocks have all been swept into the so-called “AI scare trade.”

Structural Risk or Sentiment Overshoot?

Market veterans remain divided. Some argue that structural risks tied to AI are being underestimated — particularly regarding labor displacement and margin compression across service industries. Others contend that Monday’s selloff represents an exaggerated reaction to a speculative framework rather than concrete earnings deterioration.

The episode illustrates a deeper tension in equity markets: investors are recalibrating the durability of existing business models in an environment where AI development cycles are accelerating. At the same time, fundamentals for many of the affected companies have not materially changed in the near term.

For IBM specifically, the selloff reflects sensitivity to legacy exposure rather than immediate operational decline. The company has positioned itself as a hybrid-cloud and AI integrator, but its association with older enterprise systems makes it symbolically vulnerable in AI disruption narratives.

Looking ahead, volatility tied to AI headlines is likely to persist. Markets are transitioning from pricing AI as a uniform growth engine to assessing it as a redistributive force — one that may create winners and losers across sectors. Investors will need to distinguish between genuine structural erosion and sentiment-driven overshoot.

In the near term, positioning, narrative shifts, and policy developments may drive price action more than quarterly fundamentals. The AI revolution remains real — but so too is the risk of overreaction in markets primed for disruption.