Slumping tech stocks revive concerns about AI-driven disruption

Technology shares fell sharply, with the S&P/TSX Information Technology Index dropping more than 3% and falling over 20% year to date, as analysts cited renewed worries that artificial intelligence could disrupt business models and valuations.

Technology shares fell on Monday, renewing discussion about how artificial intelligence could reshape companies and markets. The decline followed losses in U.S. markets and came amid wider uncertainty about global trade. Analysts and portfolio managers described the move as driven in part by fresh concern over AI’s potential to erode established business moats. Some experts also said parts of the sell-off may be overdone while others flagged lasting risks for certain sectors. Key points: - The S&P/TSX Capped Information Technology Index fell more than 3% on the day and is down over 20% year to date, while the broader S&P/TSX Composite has gained nearly 6% in 2026. - U.S. markets tracked the weakness, with the NASDAQ 100 down more than 1% on Monday. - Analysts linked the sell-off to renewed worries that an AI-driven rally may be ending, and some forecasters have warned of larger potential declines if disruption accelerates. - Portfolio managers noted risks concentrated in high‑multiple software and data businesses, and pointed to areas such as utilities and natural resources as relatively less exposed or potentially benefiting from AI adoption. Summary: The drop in technology shares has renewed debate about the speed and scale of AI-related disruption to business models and valuations. Market participants differ on whether recent selling reflects justified reassessment or overly broad, indiscriminate selling. The near-term market direction and the full economic impact of AI adoption are undetermined at this time.