Large share price swings and debates over artificial intelligence have characterised trading on the Australian Securities Exchange (ASX) this month, according to Morningstar market strategist Lochlan Halloway. Halloway warns investors against overreacting to initial market movements, citing examples like Woolworths, whose stock fell 15 per cent in August due to market share losses, only to rebound 13 per cent this week after its interim results. Woolworths is a major Australian supermarket chain, and one of the country’s largest retailers, providing groceries and other consumer goods to households nationwide.
Halloway suggests that while share prices can sometimes signal fundamental changes, they often reflect market noise, particularly for established businesses. He notes that the recent sell-off in technology stocks reflects fears that AI will reduce demand for software and labour. However, history suggests technological disruption often redirects and expands work rather than eliminating it, creating new industries and revenue streams over time.
WiseTech Global’s plan to cut up to 2000 roles, citing AI efficiencies, has been a recent flashpoint. WiseTech Global is a logistics software company that provides solutions for managing global supply chains. Halloway suggests this move is more aligned with WiseTech’s post-acquisition strategy, which involves integrating acquired technologies and consolidating teams, rather than a purely AI-driven decision. He says the company has made some 50 acquisitions, and each time the pattern repeats: the acquired technology gets rewritten, redundant sales teams are consolidated, and some developers are let go.
Ultimately, Halloway believes that established technology companies are well-positioned to leverage AI and develop new tools, despite potential disruptions. He states that AI can and probably will disrupt the old way tech businesses operated, but the big incumbents are among those best placed to capitalise on it and to build the tools we cannot yet imagine.
