A number of stocks fell during the afternoon session after the “AI replacement” narrative reached a fever pitch following the release of new models from Anthropic and OpenAI.
The simultaneous debut of Anthropic’s Claude Opus 4.6 and OpenAI’s ‘Frontier’ agent platform raised concerns that autonomous agents are no longer just tools, but new operating systems that can cannibalize traditional software. This suggests that specialized applications could be reduced to mere functions within frontier models, making older license-based licensing models increasingly obsolete.
The catalyst is the unprecedented action power of the models. Opus 4.6’s ‘software hunting’ capability allows it to independently monitor and patch complex codebases, while OpenAI’s Frontier platform bypasses traditional CRM and ticketing interfaces to perform enterprise work directly. By commoditizing advanced workflows into cheap API calls, these releases threaten software giants’ recurring revenues. As AI builds custom tools on demand, the market is aggressively repricing the entire software application layer.
The stock market overreacts to news, and big price drops can provide good opportunities to buy high-quality stocks.
The following stocks, among others, were affected:
PagerDuty stock is quite volatile, having seen 18 moves of more than 5% in the past year. In that context, today’s move indicates that the market sees this news as meaningful, but not as something that would fundamentally change its perception of the company.
The previous big move we wrote about was two days ago, when the share price fell 12.1% on news that a broad sell-off was sweeping the software sector, driven by growing concerns about the impact of artificial intelligence. This led to institutional repositioning as merchants turn away from traditional SaaS providers in favor of companies with more defensible, AI-integrated moats. The tech-heavy Nasdaq Composite index fell 0.8%, while the broader S&P 500 also fell.
