Shares in trucking and logistics companies fell sharply as the sector became a target of investors worried that new artificial intelligence tools could reduce demand.
Algorithm Holdings, a former in-vehicle karaoke system maker turned AI company with a market capitalization of just $6 million, unveiled a new tool that sent stocks tumbling on Thursday, making the logistics industry the latest victim of AI jitters. AI jitters are already shaking up publicly traded companies operating in software and real estate.
Announcements about the performance capabilities of Algorithm’s semi-cab platform, which it claims will allow customers to expand cargo volumes by 300% to 400% without increasing headcount, prompted a roughly 30% rise in the company’s stock price on Thursday.
However, the announcement caused the Russell 3000 Truck Index, which measures stocks in the U.S. trucking sector, to fall 6.6% on Thursday, with CH Robinson Worldwide plunging 15% by the close of trading and dropping as much as 24%.
The overall sector decline (Landstar System, 16%, RXO, 20.5%, JB Hunt Transportation Services and XPO, both down about 5%) was the worst since President Donald Trump’s tariff trade war last April.
“The level of paranoia is Category 5,” said Joseph Shaposhnik, portfolio manager at Rainwater Equity. “This is not something we’ve seen in a long time.”
The CEO of Algorithm Holdings expressed disbelief that the company could trigger such a massive artificial intelligence “fear trading” reaction.
“I never thought this day would come,” said Gary Atkinson, whose company was considered a “penny stock” in terms of stock market size. “It’s like David versus Goliath.”
Publicly traded pharmaceutical distribution stocks were also caught up in the decline, with McKesson Corp. and Cardinal Health down about 4%.
In Europe, logistics business DHL Group fell 4.9%, DSVA/S fell 11% and Kuehne + Nagel International fell 13% in late Thursday trading.
“[There is an] “The emerging conversation around open source automation agents like Molt Bot raises the prospect of automating routine back-office tasks and leveling the technology playing field for small businesses,” said Baird analyst Daniel Moore.
Algorithm previously focused on developing in-car karaoke systems, but sold its singing machine business to Stingray in 2025 for $4.5 million before pivoting to an AI cargo platform.
In London, shares in RELX (formerly Reed Elsevier) rose 5% in early trading, reversing some of the plunge the European publishing and legal software company suffered last week after Anthropic unveiled new features for its chatbot Claude.
Neil Wilson, investor strategist at Saxo UK, said: “We’re seeing widespread AI fear trading happening, and it’s extending to all but materials, energy and consumer staples, which are immune to the disruption.” “This AI fear trade has been the dominant narrative over the past few sessions, with many industries and entire sub-sectors caught up in the sell-off as investors believe businesses will be subject to significant disruption from AI.”
