Joseph Carlson argues that a fast-moving AI narrative is driving a broad selloff in software and data-heavy stocks, while capital rotates into companies seen as less exposed to AI or better positioned to benefit from it. He defends holdings like S&P Global, Moody's, and especially Meta, and says the market is overshooting near-term fears even as AI disruption is real.
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This episode is built around a single thesis: investors are reacting to a viral “something big is happening” AI narrative, and that narrative is driving a sharp repricing across software, information services, and even some AI-capex leaders. Joseph Carlson says his portfolio is down materially year to date because many of his holdings sit in categories the market now views as vulnerable to AI. He highlights steep declines in software names such as Adobe, Salesforce, Atlassian, HubSpot, ServiceNow, monday.com, Duolingo, and Intuit, and also notes pressure in financial-data names like S&P Global, Moody’s, Equifax, and FactSet. He argues the market is no longer pricing these businesses on near-term earnings or cash flow, but on a fear-driven story: AI is improving so quickly that it may commoditize office work, software, financial analysis, legal work, customer service, and content …
Near term, the tape favors names seen as insulated from AI disruption while punishing software and data businesses, so momentum and narrative are the key risk factors. Meta may stay volatile because the market is still debating whether AI spending is an investment or a drag.
Over the next few months, the market should start differentiating between companies that merely use AI as a feature and those whose core economics are actually threatened by it. If earnings and renewals stay solid, the current selloff in select data and platform names could reverse; if not, the de-rating can continue.
Structurally, AI looks like a regime shift that changes how software, knowledge work, and data products are built and priced. The durable winners are likely to be firms with proprietary datasets, strong distribution, and the balance sheet to keep investing through the transition.
The portfolio drawdown is being driven by a market-wide AI narrative that is crushing software and software-adjacent stocks.
He repeatedly says the selloff is narrative-driven and centered on AI threat perception.
AI is improving so fast that it may become better than most humans at many knowledge-based tasks within a year or two.
He cites the viral post and Emad-style claims about superhuman performance across many tasks.
OpenAI’s Codex was used to help create itself, suggesting an early recursive-improvement loop.
He interprets the technical note as evidence of AI self-improvement.
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