Jack Pitcher

And that means revenues will go lower.

We don't talk to very many people who think these huge software companies are about to go out of business or anything like that, but

If the projections go from them continuing to increase sales year after year, and now we're projecting that slowing or we're projecting a decrease in sales from some various reasons, that's a really big hit to their stock price.

Hey listeners, it's Saturday, February 7th.

I'm Jack Pitcher for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them.

Let's get to it.

February opened with fireworks, with markets posting one of their most volatile weeks of the last year.

The driver?

Rapid advancements in AI are making investors question some long-held assumptions.

Software developers, data and research companies, and IT services providers all got clobbered this week on concerns that AI is a threat to their businesses.

The sell-off was most pronounced on Tuesday, when Wall Street analysts zoomed in on new features from Anthropic's AI model, Claude.

Its ability to assist with legal research and review prompted investors to dump shares of companies that focus on those areas.

The sell-off quickly spread to software companies, with several recording their sharpest single-day stock declines since the pandemic.

Investors buying the dip helped stocks gain back some ground on Friday, but the tech-focused sell-off caused an unusually large divergence among the major indexes.

For the week, the tech-heavy Nasdaq Composite dropped 1.8%, while the Dow Jones Industrial Average, which has less software exposure, rose 2.5% to close at a record high above the 50,000 mark.

The broad-based S&P 500 inched 0.1% lower.

Let's turn to one of the S&P 500's biggest losers for the week.

Gartner, a giant in the IT research and advisory industry, fell victim to the AI sell-off and its own quarterly results.

Not only did the company report lower fourth quarter earnings on Tuesday, its forecast for the year also fell below Wall Street's expectations.

Concerns that generative AI will reduce demand for Gartner's data and research reports has weighed on its shares for a year.