Market Views: Which sectors face extinction in the AI revolution?

The transformative power of artificial intelligence is creating both winners and losers across global markets, with investors increasingly differentiating between companies poised to benefit from AI adoption and those facing potential obsolescence.

While Nvidia has soared to become the world's most valuable company at nearly $4.5 trillion and AI startups continue to attract massive funding, a parallel narrative of disruption is emerging. Investors are now actively fleeing stocks in sectors perceived to be vulnerable to AI-driven displacement.

A basket of 26 companies identified by Bank of America as most at risk from AI has underperformed the S&P 500 Index by approximately 22 percentage points since mid-May. Companies like website building platform Wix.com, photo provider Shutterstock and Adobe have seen significant share price declines as concerns surface that AI tools can replicate or replace their core services.

The pace of this disruption appears to be accelerating, with industry analysts noting that changes initially expected to unfold over five years now seem likely to materialise within two. Service-based businesses with high headcounts appear particularly vulnerable as AI capabilities expand.

In light of these developments, AsianInvestor asked fund managers and market analysts which sectors they believe face the greatest AI disruption risk and how investors should navigate this rapidly evolving landscape.

The following responses have been edited for brevity and clarity.