What Happened?
Shares of stock photography and footage provider Shutterstock (NYSE:SSTK) fell 3% in the afternoon session after growing investor fears that artificial intelligence will reshape the U.S. market and disrupt established business models. The decline stems from a stark warning by Bank of America, which labeled Shutterstock as one of 26 companies facing high risks from artificial intelligence. The concern is that AI could disrupt Shutterstock’s core business by creating graphic design and data analysis services faster and cheaper. This sentiment echoes across the software industry, with a Melius analyst recently downgrading competitor Adobe, stating, “The world is coming around to the reality that AI is eating software.” The fear is that the impact of this disruption, once thought to be years away, may materialize much sooner, creating significant uncertainty for the company's future.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Shutterstock? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Shutterstock’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 39.8% on the news that the company confirmed it is being acquired by Getty Images. Shutterstock shareholders have three options for their payout: they can receive approximately $28.85 in cash per share, exchange each of their shares for about 13.67 shares of Getty Images (GETY) common stock, or opt for a mixed package of 9.17 shares of GETY stock and $9.50 in cash for each Shutterstock (SSTK) share they own.
Shutterstock is down 32.6% since the beginning of the year, and at $19.66 per share, it is trading 46.5% below its 52-week high of $36.75 from August 2024. Investors who bought $1,000 worth of Shutterstock’s shares 5 years ago would now be looking at an investment worth $402.02.
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