AI eats tech stocks

Wednesday 4 February 2026

Once mighty software is being devoured by AI. The problem is that when AI can be added to anything and everything, tailored to specific industries and even specific business needs, the broad-based software package with a big moat is history.

Tech volatility is leading broader market volatility higher. There’s no panic but there’s no retreat, either.

Seasonality isn’t pretty.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.