This week’s stock market experienced significant turmoil, with several high-profile companies feeling the brunt of the sell-off. The three major U.S. stock indices saw declines fueled primarily by concerns that rapid advancements in artificial intelligence could disrupt business profits across various sectors. Software giants were initially impacted, but this trend extended to industries such as gaming, insurance, real estate, media, as well as trucking and logistics.
The streaming giant Netflix and media company Fox were notably affected, with their stocks plunging by 6.5% and 11.6% respectively. The market reaction stemmed from rising apprehensions that AI-generated content may pose a threat to traditional streaming and television platforms. Analysis from CNBC Pro indicated that several stocks have reached levels classified as technically oversold, which suggests a potential for recovery in the near term. A stock is deemed oversold when its 14-day relative strength index (RSI) falls below 30, while a stock with an RSI exceeding 70 is viewed as overbought, indicating a selling opportunity.
Among the stocks highlighted as oversold, Fox Class A shares currently sport an RSI of nearly 18.6. Netflix also makes this list, with an RSI around 24. Despite the downturn in media stocks, Wells Fargo analyst Steven Cahall pointed out that the market’s reaction could be exaggerated. He noted that Fox’s focus primarily on live sports and news makes the concerns surrounding AI threats appear overstated.
The sharpest decline was seen in DoorDash, which holds the distinction of being the most oversold stock on Wall Street. It recorded an RSI of 16.45 and suffered a loss of more than 12% this week. Upcoming earnings on Wednesday are expected to be pivotal, with Bank of America reaffirming its buy rating ahead of the results. The bank expressed optimism that a strong top-line performance paired with a stable margin outlook could create a positive turning point for the company’s stock. Furthermore, they highlighted limited AI-related risks for DoorDash due to its robust network of restaurants, couriers, and subscribers.
Additional stocks classified as oversold this week include Intuit, Booking Holdings, and Amazon. The e-commerce behemoth Amazon faced a 5.5% decline, bringing its year-to-date losses to approximately 14%, marking a challenging onset to 2026 for technology stocks.
Conversely, the market also identified several overbought stocks, with real estate firms Equinix and Texas Pacific Land topping the list. Both exhibited RSI levels around 85 and 82, respectively. This week, Equinix’s shares surged by 12.7% following positive first-quarter guidance and a dividend increase for the 11th consecutive year, benefiting from a significant upswing in data center demand. Additionally, companies such as Verizon, Marriott International, and Motorola Solutions also fell into the overbought category.
Overall, the market’s volatility presents both challenges and potential opportunities for investors navigating these fluctuations.
