Lexicon Financial Group Weekly Update — February 4, 2026
“Data is the new oil.”
From the desk of Craig Swistun, CIM, MFA-P, Portfolio Manager, Raymond James Investment Counsel, and Wayne Hendry, Client Relationship Manager, Raymond James Investment Counsel
ISSUE 214
Looking Around
Marc Andreessen, the venture capitalist-turned-tech-philosopher, was quoted in 2011 as saying “software is eating the world.” He captured a fundamental shift as digital technology transformed every industry it touched globally.
Six years later, Nvidia CEO Jensen Huang updated this statement by stating that “software is eating the world … but artificial intelligence (AI) is eating software." And Nvidia's multi-trillion-dollar market capitalization has validated this statement. At least so far. (1)
This week shares in software and analytics companies are down in Asia and Europe. This, after a hammering of these shares on Wall Street earlier this week due to the release of more AI-driven automation tools by Anthropic, the maker of the Claude chatbot. Some are concerned that these tools could replace many of the current offerings of these companies. Even before Anthropic introduced its latest tools, shares in companies like Salesforce, HubSpot and Atlassian had fallen by 30 per cent or more over the past year. It looks like fears that artificial intelligence will disrupt the software industry are growing. (2) After all, who needs software when you have AI?
But are these fears justified?
Nvidia's Jensen Huang has stated that the idea that AI will replace software is "the most illogical thing in the world." Interestingly, this is far from the first time people have wrestled with the concept of artificial intelligence – the term was invented in 1955. Since then, it has emerged and re-emerged in different ways, promising both the rise and fall of industrial civilization. According to Forbes, the term “AI” might be the most successful marketing campaign in history. However, this cannot simply replace the $800 billion software global industry employing millions overnight.
But today, there is no mistaking the impact AI is making. And the unique thing about how AI has been marketed is its enduring dual nature: it is exciting and alarming and wonderful and terrible, all at the same time. It generates financial activity as people buy and sell based on their fear, greed and other emotions (this is behavioural finance on full display). It has also succeeded in attracting billions from (mainly) the private sector. (3)
As in the past, the campaign is led by AI leaders, who promise a brand new world, and detractors, who warn we will be taken over by Skynet from the Terminator movie franchise.
All of this said, most of the selling this week was likely overdone, as it is yet to be seen how well AI-driven automation tools can perform tasks and to what extent they are adopted. This maybe a wait-and-see moment, but we believe technology will continue pushing you and us towards the future.
Read and Watch
Want deeper insight into topics in your Weekly Update? Then, read and/or right click:
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Looking Back
Precious metals (gold and silver) were key drivers of Canada’s outperforming stock market, the S&P/TSX composite index (TSX), last year but slammed into reverse on Friday last week. The declines on the TSX mainly came from the basic materials sector, which includes mining companies. This dragged the TSX down nearly 1,100 points in the biggest selloff since last year’s Liberation Day volatility. This drop followed the announcement that U.S. President Donald Trump picked former Federal Reserve governor Kevin Warsh as the next Federal Reserve (Fed) chair, which eased concerns about inflation and central bank independence. Gold is historically a safe haven for investors during times of rising inflation. (4)
Despite the turbulence experienced by shares in software and analytics companies, U.S. markets ended the week in positive territory. Large-cap value stocks gained and outperformed their growth equals, while small- and mid-cap stocks lagged and finished last week lower.
The Conference Board’s gauge of consumer confidence in January hit its lowest level since May 2014, tumbling more than expected to 84.5 from the previous month’s reading of 94.2. This shows that U.S. consumers’ views on the economy and the labour market have weakened. The Fed, after three consecutive rate cuts, left the benchmark fed funds rate unchanged in the 3.50 to 3.75 per cent range, as expected. A 10–2 vote underpinned the decision, with the two dissenting policymakers favouring a 25-basis-point reduction. The Fed’s accompanying policy statement had a more positive note on the U.S. economy, which has been expanding at a solid pace. It also described inflation as “somewhat elevated” and noted that while job growth has remained low, the unemployment rate has shown signs of stabilizing. Fed Chair nominee, Kevin Warsh, if confirmed by the Senate, will succeed Chair Powell when his term expires in May.
The pan-European STOXX Europe 600 Index ended last week 0.44 per cent higher as earnings optimism drowned out anxiety about trade and geopolitics. However, other major European stock indexes were mixed. The mood among consumers and businesses was more upbeat at the start of 2026, with the European Commission (EC) sentiment indicator rising to 97.2 in January, slightly below the long-term average. Confidence improved across all sectors, apart from construction, where it held steady. Sentiment in France strengthened markedly, likely due to subsiding political tensions after the 2026 budget was adopted.
Japan’s stock markets ended lower last week, as the technology segment was weighed down by concerns about the sustainability of massive artificial intelligence spending, while yen strength dampened the earnings prospects of Japan’s export-oriented companies. Investors are focused on Japan’s lower house election on February 8, with several major media outlets converging around the message that Prime Minister Sanae Takaichi’s Liberal Democratic Party could be on track to win a majority of seats without a coalition partner.
Mainland Chinese stock markets ended the week little changed. Thirteen out of 20 Chinese provinces that have publicly released their 2026 economic targets set out lower GDP growth goals compared to last year. Most of the provinces reduced their GDP targets by half a percentage point or shifted to a range with a lower end. These provinces include the economically vital coastal provinces Guangdong and Zhejiang, home of technology bellwether Alibaba and other leading companies. (5)
The opinions expressed are those of Craig Swistun and not necessarily those of Raymond James Investment Counsel which is a subsidiary of Raymond James Ltd. Statistics and factual data and other information presented are from sources believed to be reliable, but their accuracy cannot be guaranteed. It is furnished on the basis and understanding that Raymond James is to be under no liability whatsoever in respect thereof. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Raymond James advisors are not tax advisors, and we recommend that clients seek independent advice from a professional advisor on tax-related matters.
Software Ate The World, AI Ate Software And Now Philosophy Is Eating AI, Josipa Majic Predin, Forbes, May 22, 2025
Why A.I. Fears Are Battering Stocks, Again, Andrew Ross Sorkin, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Niko Gallogly, Brian O’Keefe, Ian Mount and Grady McGregor, The New York Times, February 4, 2026
What's Behind Wall Street's Reaction To AI Replacing Software? Gil Press, Forbes, February 5, 2026
TSX loses over 1,000 points as gold, mining stocks drop; U.S. markets also down, The Canadian Press via BNN Bloomberg, January 30, 2026
Global markets weekly update - Federal Reserve keeps rates unchanged, T. Rowe Price, January 30, 2026
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Looking to Learn?
If you want to know more about some of the topics we wrote about this week, just click on the links below:
Why Anthropic’s new Claude plugins sparked global selloff in software stocks
