What Happened?
A number of stocks fell in the afternoon session after software stocks continued to pull back as investors assessed the potential for new AI automation tools to compete with established software platforms.
The drop followed Anthropic's unveiling of a major upgrade to its enterprise AI tools, which were positioned as systems capable of end-to-end workflow automation. The company framed the tool as a direct replacement for repetitive, software-driven work, not just an assistant. This announcement ignited investor fears that AI was shifting from a productivity enhancer to a direct substitute for large parts of the software and services industry.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Gig Economy company Upwork (NASDAQ:UPWK) fell 6.9%. Is now the time to buy Upwork? Access our full analysis report here, it’s free.
- Online Marketplace company eBay (NASDAQ:EBAY) fell 6.5%. Is now the time to buy eBay? Access our full analysis report here, it’s free.
Zooming In On Upwork (UPWK)
Upwork’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 2.9% on the news that President Trump cooled fears of a transatlantic trade war by calling off scheduled tariffs on European allies. The rally followed a productive meeting in Davos with NATO Secretary General Mark Rutte, where a "framework of a future deal" regarding Greenland and the Arctic region was established. By explicitly ruling out the use of military force and suspending the 10% tariffs previously set for February 1st, the administration provided the "sigh of relief" the market desperately needed after Tuesday's sharp sell-off. Technology and semiconductor leaders like Nvidia and AMD spearheaded the recovery as investors quickly pivoted back into growth stocks. The "Sell America" trade from the prior session reversed sharply, with the Nasdaq Composite jumping 1.5% and the S&P 500 erasing its 2026 losses. This rebound was further supported by a stabilization in the bond market; as tariff-related inflation fears subsided, the 10-year Treasury yield retreated from its recent highs, creating a more favorable backdrop for equity valuations across the board.
Upwork is down 14.1% since the beginning of the year, and at $17.04 per share, it is trading 22.9% below its 52-week high of $22.11 from January 2026. Investors who bought $1,000 worth of Upwork’s shares 5 years ago would now be looking at an investment worth $345.37.
While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report, it’s free.