The recent developments in the AI sector have created a unique opportunity for savvy investors. The release of new tools by Anthropic, a prominent AI company, has significantly impacted stock market dynamics, especially for technology firms.
After the launch of Anthropic’s business-oriented tools for its Claude large language model (LLM), many may have assumed the stock market wouldn’t be affected. However, Anthropic is not publicly traded yet, and firms like Microsoft have already been offering AI tools for quite some time. Nevertheless, the introduction of Claude Cowork, particularly its industry-specific plugins for sectors such as law, finance, and sales, sent shockwaves through the market, affecting a range of software businesses and competitors of Anthropic.
One AI stock in particular, however, seems to have faced unwarranted scrutiny, and several insiders are seizing the chance to invest. Let’s delve into their strategies and motivations.
Image source: Getty Images.
Reasons Alphabet Was Impacted
In the aftermath of Claude Cowork’s introduction, several companies, particularly those in the business-focused software-as-a-service (SaaS) space like Salesforce, Intuit, and Atlassian, faced sharp declines—down 27.9%, 33%, and 41.6% year-to-date, respectively. Investors grew anxious that businesses would reconsider spending on costly SaaS tools if AI alternatives could perform the same functions more efficiently.
Alphabet, Google’s parent company, was also affected, suffering a drop of over 6% in the week following the announcement. While this decline is minor compared to the 19.3% plunge experienced by legal database provider Thomson Reuters, it remains notable for a company that does not offer the specialized software solutions impacted by Claude Cowork.
Today’s Change
(-1.06%) $-3.28
Current Price
$305.72
Key Data Points
Market Cap
$3.7T
Day’s Range
$303.71 – $308.63
52wk Range
$140.53 – $349.00
Volume
38M
Avg Vol
38M
Gross Margin
59.68%
Dividend Yield
0.27%
Despite this, Google has a strong presence in the AI landscape with its own LLM, Gemini. In November, it released an upgraded version called Gemini 3, which offered significant improvements and even surpassed OpenAI’s ChatGPT in certain intelligence metrics. This rollout included advanced AI capabilities and an updated Nano Banana image generator, attracting a surge of paid subscribers, many of whom likely transitioned from ChatGPT. Investors appear increasingly concerned that Claude may now entice those same subscribers away from Google.
Image source: Getty Images.
Stay Calm and Invest Wisely
Noted investor Warren Buffett once advised, “Be fearful when others are greedy, and greedy when others are fearful.” In a sign of confidence amidst market turbulence, Buffett’s Berkshire Hathaway has recently made its first investment in Alphabet. Other prominent investors are following suit, purchasing Alphabet shares while prices are low.
For instance, billionaire investor Cathie Wood made a significant move on February 5, acquiring $21.6 million in Alphabet shares across three of her Ark Invest funds, including a new $1.8 million stake in the ARK Space & Defense Innovation ETF and a substantial $15 million investment in the flagship ARK Innovation ETF.
Intelligent investors may want to consider joining these prominent figures by capitalizing on the current dip in Alphabet shares.
John Bromels holds positions in Alphabet, Atlassian, Berkshire Hathaway, and Microsoft. The Motley Fool has positions in and endorses Alphabet, Atlassian, Berkshire Hathaway, Intuit, Microsoft, and Salesforce. The Motley Fool follows a disclosure policy.
