AI panic has spread quickly across the stock market in the last week. With each new update to the AI toolbox, investors have been forced to pick winners and dump losers in real time. It started with software last week, with the most dramatic repricing in the space in nearly 30 years, erasing $2 trillion in market cap. But the fear has since spread. In a development seemingly out of left field on Thursday, a company that used to make karaoke machines sent trucking stocks tumbling after it published a pap ...

Core Insights - Ryan Specialty Group reported revenue of $751.21 million for the quarter ended December 2025, marking a year-over-year increase of 13.2% [1] - The earnings per share (EPS) for the same period was $0.45, unchanged from the previous year [1] - The reported revenue fell short of the Zacks Consensus Estimate of $777.88 million, resulting in a surprise of -3.43% [1] - The company experienced an EPS surprise of -9.4%, with the consensus EPS estimate being $0.50 [1] Revenue Breakdown - Fiduciary investment income was reported at $13.17 million, below the estimated $14.25 million [4] - Net commissions and fees totaled $738.05 million, compared to the estimated $771.1 million [4] - Binding Authority revenue was $84.05 million, slightly below the two-analyst average estimate of $85.81 million [4] - Underwriting Management revenue reached $268.31 million, compared to the average estimate of $276.94 million [4] - Wholesale Brokerage revenue was reported at $385.69 million, below the estimated $406.7 million [4] Stock Performance - Ryan Specialty's shares have returned -14.2% over the past month, contrasting with the Zacks S&P 500 composite's -0.3% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - For Q4 2025, total revenue grew 13% to $751 million, with organic growth of 6.6% and M&A contributing over five percentage points to the top line [31] - Full year 2025 revenues surpassed $3 billion, up 21% year-over-year, driven by organic growth of 10.1% and significant contributions from M&A [4][32] - Adjusted EBITDA for 2025 grew 19.2% to $967 million, with an adjusted EBITDA margin of 31.7%, slightly down from 32.2% in the prior year [4][32] - Adjusted earnings per share increased by 9.5% to $1.96 [4][32] Business Line Data and Key Metrics Changes - The property business experienced a modest decline, particularly in Q4 where pricing dropped by 25%-35% on large accounts [16][17] - The casualty practice had a strong year, with significant price increases in high-hazard lines exceeding 10% [18] - Delegated authority revenue doubled over the last two years to $1.4 billion, now representing 47% of total revenue [8] Market Data and Key Metrics Changes - The insurance market is currently experiencing significant volatility, with rapid shifts in pricing and market sentiment [6][7] - The company noted a trend of admitted carriers re-entering certain segments, particularly on smaller accounts, but this has not significantly impacted overall rates [25] - The construction segment remains strong, although macroeconomic pressures have delayed project timelines [53][56] Company Strategy and Development Direction - The company is launching Project Empower, a three-year restructuring program aimed at improving efficiency and creating headroom for additional investment [10][36] - A $300 million share repurchase program has been authorized, reflecting confidence in the company's valuation and long-term outlook [12][34] - The focus remains on strategic investments in growth, talent acquisition, and innovation, particularly in AI and technology [29][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth in property despite near-term pricing pressures, citing factors like increased demand for E&S solutions [17] - The company anticipates high single-digit organic revenue growth for 2026, reflecting current market conditions and continued property pricing pressures [37] - Management emphasized the importance of maintaining strong relationships with clients and adapting to market changes to capture new business opportunities [49] Other Important Information - The company completed five acquisitions in 2025, contributing to a diversified platform with over 300 products [9][25] - The adjusted effective tax rate was 26% for both the quarter and the full year, with expectations for a similar rate in 2026 [33] Q&A Session Summary Question: Can you elaborate on the organic growth guidance for 2026? - Management noted that property pricing declines are expected to continue, impacting overall growth expectations, which are now set at high single digits for 2026 [41][43] Question: How does the company view AI's impact on the brokerage sector? - Management views AI as an ally that will enhance efficiency and client service, emphasizing the importance of relationships and expertise over technology alone [48][50] Question: What is the outlook for the construction segment? - The construction segment remains strong, with a robust pipeline, although macroeconomic pressures have caused delays in project timelines [52][56] Question: How does the share repurchase program fit into the company's M&A strategy? - Management clarified that the share repurchase program does not diminish the commitment to M&A, which remains a top priority for capital allocation [59][60] Question: What are the expectations for client demand in the current environment? - Management indicated that while there are no measurable trends of clients buying less coverage, the structure of demands is changing, with higher retention levels in certain accounts [62][63]

Financial Data and Key Metrics Changes - For Q4 2025, total revenue grew 13% to $751 million, with organic growth of 6.6% and M&A contributing over five percentage points to the top line [31] - Full year 2025 revenues surpassed $3 billion, up 21% year over year, driven by organic growth of 10.1% and significant contributions from M&A [4][32] - Adjusted EBITDA grew 19.2% to $967 million, with an adjusted EBITDA margin of 31.7%, slightly down from 32.2% in the prior year [4][32] - Adjusted earnings per share increased by 9.5% to $1.96 [4][32] Business Line Data and Key Metrics Changes - The property business experienced a modest decline, particularly in Q4 where pricing dropped 25%-35% for large accounts [16][17] - The casualty practice had a strong year, with significant price increases in high-hazard lines exceeding 10% [18] - The delegated authority business generated $1.4 billion in revenue, accounting for 47% of total revenue, up from $700 million and 35% two years ago [8] Market Data and Key Metrics Changes - The insurance market is currently experiencing significant volatility, with rapid shifts in market sentiment [6][7] - The company noted a trend of admitted carriers stepping back into certain segments, particularly on smaller accounts [16] - The overall market conditions are expected to lead to continued pricing declines in property for 2026 [17] Company Strategy and Development Direction - The company is focused on a diversified platform to deliver innovative solutions, emphasizing the importance of specialized expertise and top talent [7][8] - A three-year restructuring program called "Empower" is being launched to improve efficiency and create headroom for additional investment [10][36] - The company has authorized a $300 million share repurchase program, reflecting confidence in its long-term outlook [12][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth in property despite near-term pricing pressures, citing factors like increasing populations in cat-affected areas [17] - The company anticipates high single-digit organic revenue growth for 2026, reflecting current market conditions and continued property pricing pressures [37] - Management emphasized the importance of AI as an enabler to improve efficiency and client relationships [47][49] Other Important Information - The company completed five acquisitions in 2025, contributing to its growth strategy [5][25] - The Empower program is expected to incur a cumulative special charge of approximately $160 million through 2028, with anticipated annual savings of $80 million by 2029 [11][37] Q&A Session Summary Question: Can you elaborate on the organic growth guidance for 2026? - Management noted that property pricing declines are expected to continue, impacting overall growth guidance, which is now set at high single digits for 2026 [41][42] Question: How does the company view AI's impact on the brokerage sector? - Management views AI as an ally that will enhance efficiency and client service, emphasizing the importance of relationships and trust in the brokerage business [46][48] Question: What is the outlook for the construction segment? - The construction segment remains strong, with a robust pipeline, although macroeconomic pressures have caused delays in project timelines [51][54]

Financial Data and Key Metrics Changes - For Q4 2025, total revenue grew 13% to $751 million, with organic growth of 6.6% and contributions from M&A adding over five percentage points to the top line [31] - Full year 2025 revenues surpassed $3 billion, up 21% year over year, driven by organic growth of 10.1% and strong M&A contributions [4][32] - Adjusted EBITDA grew 19.2% to $967 million, with an adjusted EBITDA margin of 31.7%, slightly down from 32.2% in the prior year [4][32] - Adjusted earnings per share increased 9.5% to $1.96 [4][32] Business Line Data and Key Metrics Changes - The property business experienced a modest decline, particularly in Q4 where pricing dropped 25%-35% on large accounts [16][17] - The casualty practice had a strong year, with significant price increases in high-hazard lines exceeding 10% [18] - Delegated authority revenue doubled over the last two years to $1.4 billion, now representing 47% of total revenue [8] Market Data and Key Metrics Changes - The insurance market is currently experiencing significant volatility, with rapid shifts in pricing and market sentiment [5][6] - The company noted a trend of admitted carriers stepping back into certain segments, particularly on smaller accounts [16] - The overall market conditions are expected to lead to continued pricing pressures in property for 2026 [17][36] Company Strategy and Development Direction - The company is focused on a diversified platform to deliver innovative solutions, emphasizing the importance of specialized expertise and top talent [6][10] - A three-year restructuring program, Project Empower, is being launched to improve efficiency and create headroom for additional investment [10][35] - The company has authorized a $300 million share repurchase program, reflecting confidence in its long-term outlook and addressing current valuation dislocation [12][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth in property despite near-term pricing pressures, citing factors like increased demand for E&S solutions [17] - The company anticipates high single-digit organic revenue growth for 2026, reflecting current market conditions and continued investment in talent and technology [36] - Management emphasized the importance of AI as an enabler to improve client service and operational efficiency [46][47] Other Important Information - The company completed five acquisitions in 2025, contributing to significant diversification and expansion of its product offerings [9][25] - The board approved an 8% increase in the quarterly dividend for Class A stockholders, now at $0.13 per share [33][34] Q&A Session Summary Question: What is the driver behind the organic growth guidance for 2026? - Management noted that continued property pricing declines and moderating casualty growth are expected to impact organic growth, leading to a high single-digit guidance for 2026 [40][41] Question: How does the company view AI's impact on the brokerage sector? - Management views AI as an ally that will enhance efficiency and client service, emphasizing the importance of relationships and expertise over technology alone [46][47] Question: Can you discuss the share repurchase program and its relation to M&A? - Management clarified that the share repurchase program does not diminish their commitment to M&A, which remains a top priority for capital allocation [56][58]

Core Viewpoint - The artificial intelligence (AI) landscape is becoming increasingly volatile, shifting from a broad market uplift to specific stock declines, particularly affecting technology and related sectors [1][2]. Group 1: Market Dynamics - Enthusiasm for AI has driven a bull market in the U.S., particularly benefiting technology companies and those involved in data center infrastructure [2]. - Concerns regarding AI's disruptive potential are causing investors to reassess valuations in various industries, including software and wealth management [3]. - Major companies like Amazon and Microsoft are facing pressure on their share prices due to scrutiny over their significant AI capital expenditures [4]. Group 2: Stock Performance - The S&P 500 software and services index has seen a decline of 15% since the end of January 2026, influenced by AI-related news [4]. - Shares of U.S. brokerages and insurance companies have dropped significantly, with firms like LPL Financial and Charles Schwab each falling by at least 7% following the introduction of AI features by competitors [5]. - Microsoft shares are down 16% and Amazon over 11% this year, reflecting concerns about their high capital spending on AI [7]. Group 3: Investment Opportunities - Some investors view the current market as a buying opportunity, with the forward price-to-earnings ratio for the software and services index falling to 22.7 times, the lowest in nearly three years [9]. - JPMorgan equity strategists recommend increasing exposure to higher-quality, "AI-resilient" software companies, suggesting a potential rebound in the market [9]. - Economic "moats" are highlighted as a means for investors to identify strong companies amidst the volatility, as indiscriminate selling creates investable opportunities [9]. Group 4: Future Outlook - The S&P 500 is projected to see earnings rise over 14% in 2026, with expectations of further interest rate easing by the Federal Reserve [11]. - However, AI-driven volatility is complicating stock selection, with S&P 500 constituents that are down averaging a 10.6% decline, compared to a 5.9% decline for the same period last year [12].

Group 1 - The artificial intelligence landscape is seen as both a promising investment opportunity and a source of risk, with enthusiasm driving stock gains in technology and related sectors [1][2] - Concerns over AI's disruptive potential are causing investors to reassess valuations in industries such as software, legal services, and wealth management, impacting major companies like Amazon and Microsoft [2][3] - The S&P 500 software and services index has declined by 15% since the end of January, indicating a shift in market dynamics as investors react to perceived winners and losers in the AI sector [3] Group 2 - U.S. brokerages experienced significant stock declines after the introduction of AI-enabled features by wealth management startup Altruist, with major firms like LPL Financial and Charles Schwab dropping at least 7% [4] - The volatility in the market is expected to be driven by headline stories that are focused on individual companies, leading to fluctuations in stock prices [5] - Concerns regarding high capital spending in the software sector have led to declines in shares of major companies, with Microsoft down 16% and Amazon down over 11% this year [6]

Core Viewpoint - Rising fears about artificial intelligence (AI) are negatively impacting shares of companies perceived to be at risk, leading to significant sell-offs across various sectors, particularly in software and wealth management [1][2][3]. Group 1: Market Reactions - The latest selloff was triggered by a tax-strategy tool from Altruist Corp, causing shares of Charles Schwab Corp., Raymond James Financial Inc., and LPL Financial Holdings Inc. to drop by 9% or more over two days [2]. - This decline represents the deepest slide for some stocks since the trade-war meltdown in April, reflecting a sell-first, ask-questions-later mentality among investors [3]. - The software industry has been particularly affected, with new AI tools from companies like Anthropic PBC leading to a rout in stocks across various sectors, including financial services and legal services [8]. Group 2: Investor Sentiment - Investors are shifting from identifying potential winners in the AI space to avoiding companies that may be displaced by AI advancements [6]. - The narrative has changed from believing in AI and searching for use cases to recognizing the disruptive potential of newly discovered applications [7]. - Concerns about AI's impact have spread beyond the software industry, affecting US insurance brokers and wealth-management stocks due to new applications that leverage AI technology [9].

Core Viewpoint - The recent selloff in the stock market, particularly affecting companies at risk of disruption from AI technologies, reflects a growing anxiety among investors about the potential impact of AI on various industries [1][14]. Group 1: Market Reaction - The selloff was triggered by the launch of a tax-strategy tool by Altruist Corp., which caused shares of major firms like Charles Schwab Corp. to drop by 7% or more, marking the deepest decline since the trade-war meltdown in April [1][14]. - Investors are adopting a "sell-first, ask-questions-later" mentality, leading to indiscriminate selling of companies perceived to have any disruption risk [2][14]. - The stock market's reaction has wiped billions of dollars off the market values of several investment firms, indicating a strong signal about the competitive threat posed by new AI products [8][14]. Group 2: Industry Impact - The software industry has been particularly affected, with fears spreading to sectors such as financial services, asset management, and legal services following the introduction of new AI tools [6][14]. - The launch of Insurify's application using ChatGPT to compare auto-insurance rates also negatively impacted shares of US insurance brokers [7][14]. - Altruist's product, Hazel, which personalizes strategies for financial advisers, exemplifies how AI can potentially replace entire teams in wealth management for a fraction of the cost [9][14]. Group 3: Investor Sentiment - Investors are now more focused on avoiding companies that could be displaced by AI rather than identifying potential winners in the market [5][14]. - There is skepticism about the speed at which AI will disrupt industries, with some experts suggesting that tech disruption often takes longer to materialize than anticipated [10][11]. - The recent pullbacks in stock prices may also reflect broader concerns about high valuations following a rally driven by AI spending and a resilient US economy [11][12].

Group 1 - Insurify launched the first insurance application designed for ChatGPT, allowing users to inquire about insurance plans through simple conversational questions without filling out complex forms [1][3] - The stock prices of several insurance brokerage firms fell sharply, with the S&P 500 insurance index dropping 3.89%, marking the largest single-day decline since October of the previous year [3] - Insurify's new application aims to alleviate the stress of purchasing auto insurance by enabling users to ask questions in plain language and receive clear, understandable answers [3][4] Group 2 - The application combines Insurify's insurance data with ChatGPT's AI technology, allowing users to obtain insurance quotes based on their location, vehicle type, age, and driving record [3] - Users can compare not only prices but also user reviews and core coverage from different insurance companies, providing a more comprehensive understanding of the products [3] - Once users find a suitable plan, they are directed to Insurify's main platform, where licensed insurance advisors assist in completing the purchase process, saving time and avoiding repetitive information entry [4]