Artificial intelligence has emerged as a key driver of volatility and a “defining factor” in the dynamics of the European stock market. According to a recent report by UBS, the performance gap between AI developers and companies whose business models are vulnerable to automation has reached critical levels: +85% for AI developers versus -50% for traditional firms over the past three years.

UBS analysts highlight a group of high-risk service providers whose revenues are directly tied to the amount of labor time spent. Giants like Capgemini, Adecco, and Teleperformance now face the threat of being “replaced by AI labor.”

1. Coding and support: Automation of routine tasks reduces clients’ willingness to pay for human resources.

2. Margin pressure: If companies cannot transition to a pay-for-performance model or implement their own AI solutions, their “economic engine” risks stalling.

The MSCI Europe Software & Services Index has underperformed the broader market by 17% over the past month, highlighting investor concerns regarding the future of outsourcing.

Pressure has not only affected service companies but also aggregator platforms such as Rightmove and Auto Trader. AI tools capable of collecting data directly from websites undermine the value of paid placements, forcing these platforms to seek new ways to demonstrate the uniqueness of their data.

The advertising sector is witnessing a radical decline in content production costs, with traditional TV formats and agencies at risk of losing contracts. Clients are increasingly shifting creative processes in-house by utilizing automated tools.

At the other end of the spectrum are the “structural winners” — companies with deep integration into corporate architecture. SAP stands out as a benchmark: the company has reported a 30% increase in its cloud segment and expects to save about €2 billion through AI implementation.

UBS emphasizes that the market has entered a phase of “indiscriminate asset sales” for those at risk. Analysts believe that the next stage of the investment cycle will shift from acquiring pure AI infrastructure to seeking out user companies that can convert technologies into measurable growth in net profits.

Choosing stocks now requires a clear distinction between the “victims of progress” and those leveraging AI to defend their market positions.