Jefferies analysts have released a basket of major companies at risk of disruption from artificial intelligence, offering investors some guidance at a vulnerable time for U.S. stocks. Software-as-a-service providers, insurance services, logistics and real estate stocks have suffered multiple declines this year as markets fear that rapidly evolving artificial intelligence models will soon disrupt a range of traditional business models. The iShares Expanded High-Tech Software Sector ETF (IGV) has fallen more than 23% this year and is in a bear market. Many investors say the selling was at times indiscriminate, but the weakness continues to plague some big-name companies, including Robinhood and ServiceNow. And concerns remain high that the AI-induced sell-off will spill over into other industries, with investors remaining wary of potential risks down the road. “Despite recent recovery, the sector remains exposed to further developments in AI,” Desh Peramnetileke, head of quantitative strategy at Jefferies, said in a note to clients on Friday. “The Software sector trades at a P/E of 21x, in line with the market, and has a similar EPS growth rate (EPS CAGR of 16%). However, given future uncertainty, the sector may even trade at a discount.” To find stocks with significant AI-related risks, Jefferies combined return profiles with an AI-assisted search algorithm to create the “AI Risk” basket. The investment bank found 150 stocks with market capitalizations above $1 billion that face potential AI risks such as asset repricing, demand substitution, labor substitution, outer moat collapse, and price pressure. To find vulnerable stocks, Jefferies looked for quasi-industries that could be hit by a variety of disruptive threats. The company then combined these findings with stock-level returns and ran a series of pre-trained prompts to find stock-specific AI risks. Take a look at these stocks: Unity Software is at risk as AI content lowers switching costs, making it easier for developers to leverage AI to recreate and migrate assets across platforms, weakening the moat-like appeal of Unity’s ecosystem, Jefferies found. Unity has plummeted 59% year to date in 2026, making it the worst performer among Jeffries’ baskets. The video game engine maker fell 37% in February after giving disappointing first-quarter revenue guidance earlier in the month. Concerns about AI disruption will only worsen investor reaction. Software companies like Datadog , MongoDB , and ServiceNow have also been hit by AI disruption concerns. Jefferies analysts led by Peramunetilleke found that MongoDB’s moat could become disrupted as AI coding tools weaken database selection and developers become less tied to a single database architecture as switching costs fall. Duolingo is also at risk. The language learning website’s stock price has plunged 42% so far this year after it missed first-quarter results and 2026 booking forecasts, raising concerns about AI. On Jefferies’ screen, Duolingo was placed in the “reproducibility” risk category, particularly due to the risk that AI tutors could commercialize language learning. Jefferies’ basket of risk stocks also included Accenture, Robinhood Markets and DoorDash. The Wall Street firm said it could be hurt, having fallen 33% this year, if AI agents stop intermediating retail transactions.
