You cannot make this up. A tiny company called Algorhythm Holdings — ticker RIME, formerly in the karaoke business — claimed its AI technology could supercharge freight broker productivity. The result? C.H. Robinson (CHRW) cratered as much as 24% intraday on Thursday, Landstar System dropped over 14%, and the Dow Jones Transportation Average slid 4% — one day after hitting an all-time record.
The panic logic goes like this: if AI can match shippers with trucks automatically, what do you need a middleman like C.H. Robinson for? The entire freight brokerage model — billions of dollars in revenue — could theoretically be disintermediated by software. Wall Street heard “AI” and hit the sell button without asking many follow-up questions.
Here is the thing — most analysts think the selloff is wildly overdone. Benchmark analyst Christopher Kuhn put it bluntly: “I think it’s overdone. It’s unlikely that a big corporation is going to put in this software and not use a major truck broker like CH Robinson and RXO.” He’s got a point. Freight logistics isn’t a simple Uber-for-trucks problem. It involves complex negotiations, credit risk, claims management, and relationships built over decades. AI will certainly improve productivity in the space, but wholesale replacement of major brokers? That’s a stretch.
Bank analysts went further, calling the selloff “a buying opportunity” and describing C.H. Robinson as “the AI disrupter within the US truck brokerage market” — meaning CHRW is more likely to use AI to widen its competitive moat than to be destroyed by it. The company itself pushed back on the disruption narrative, pointing to its own technology investments.
For traders, the pattern here is familiar: an AI scare trade, driven more by fear of the unknown than actual business impact. Remember when ChatGPT was supposed to kill Google overnight? CHRW is a $12 billion company moving $23 billion in freight annually. A former karaoke startup making bold AI claims doesn’t change the fundamentals overnight. If you’ve been watching CHRW and looking for an entry, the market just handed you a 20% discount courtesy of a karaoke company. Do with that what you will.