A former karaoke machine company has obliterated billions of dollars in trucking market cap

Trucking industry stocks were shellacked on Thursday, with shares of freight companies like CH Robinson (down 15%) and Expeditors International (down 13%) getting smoked. The news? An interesting technology development out of a company better known for karaoke products.

A white paper published by Algorhythm Holdings — a company that previously produced consumer karaoke products and also owns 80% of AI logistics company SemiCab — said that its SemiCab AI platform lets customers scale freight volumes by 300% to 400%.

Fears that AI will disrupt the freight forwarding and brokerage industry appear to be driving the sell-off, while Algorhythm’s stock shot up 30% on the news.

Other victims of the sell-off included JB Hunt (down 5%) and Old Dominion Freight (down 4%).

The market reaction mirrors last week’s AI-led sell-off in software stocks prompted by some impressive performance out of Claude Cowork, and the similar recent sell-off seen in gaming companies following Google’s launch of its Project Genie AI tool.

The ongoing storyline in markets for the first few weeks of the year has been companies that are niche or private release compelling real-world implementation cases for AI, while existing businesses that have grown to dominate in those day-to-day sectors get smoked on the news.

The Takeaway

Are you a public company with a valuable, earnings-generating business? Congratulations, every day is now a nightmare!

Your CEO wakes up every morning expecting that some R&D lab in San Jose or an outfit that used to be called The Singing Machine Company out of Fort Lauderdale is going to cause a billion dollars of market cap to evaporate in the course of an hour. Every morning, the NYSE opening bell is some upstart’s dinner bell, and you are on the menu.