AI panic has been erasing value all around the market. Here's where 3 investing pros see it hitting next.

Group 1: AI Market Sentiment - The AI hype has diminished as investors express concerns about the technology's disruptive potential on businesses and the economy, leading to market unease [1] - The tech sector, particularly software, has experienced significant sell-offs, exacerbated by updates from companies like Anthropic and labor market concerns [1][2] - Experts note a violent sell-off in tech stocks, with investors feeling precarious about future developments in the AI sector [2][6] Group 2: Private Credit Concerns - There are growing worries about the private credit market, with analysts suggesting a "death bomb" scenario that could lead to a near-term slowdown [7][9] - Recent headlines surrounding Blue Owl Capital have reignited concerns reminiscent of the pre-2007 financial crisis, compounding market anxieties [8][10] - Big banks are also at risk due to their exposure to private credit and AI disruptions, with potential vulnerabilities highlighted by comparisons to past financial crises [10][11] Group 3: Physical AI Opportunities - Physical AI, which includes technologies like automated machinery and self-driving cars, is projected to be a significant growth area, with a total addressable market for warehouse automation expected to reach $112 billion by 2029 [13] - Analysts believe that companies adopting physical AI will find substantial opportunities, while those that do not may face significant threats [14] - The current market rotation towards cyclical stocks may expose investors to risks associated with physical AI disruptions in the industrials sector [15] Group 4: Software Sector Outlook - The software sector has been one of the hardest-hit areas during the tech sell-off, with expectations of uneven recovery [16][17] - Companies that went public during the SaaS boom and lack a strong data moat or integration into larger platforms are at risk of consolidation or elimination [17][18] - Analysts predict further declines for software companies that are vulnerable to replacement by agentic AI technologies [18]