LSEG slowly removes ‘AI risk’ tag with ambition to show growth

issued Thursday, June 11, 2026 · 03:02 PM

[LONDON] Public efforts to shed the label that London Stock Exchange Group (LSEG) is likely to succumb to AI technology are starting to persuade some shareholders and boost the company’s stock price.

Concerns about the threat posed by large-scale language artificial intelligence models like Anthropic’s Claude caused a sharp selloff in software stocks, with LSEG stock dropping nearly 13% in one day in February.

Five analysts and investors told Reuters that the market is beginning to believe that the impact on LSEG product pricing and the market share of its data business may not be as severe as previously thought.

Since it was reported in early February that US activist investor Elliott Management had begun accumulating what it described as a “substantial stake” in the company, the stock price has risen 27%, but remains 23% below its 2025 high.

And while it’s premature to call LSEG an AI winner, UBS last month removed it from its basket of companies it believes could be disrupted by new technology. Reuters could not confirm the reasons for UBS’s decision.

UBS analyst Michael Warner said LSEG will need to demonstrate that it can generate enough revenue from its AI efforts. “There’s still a ‘show me’ thing[with AI]. It’s one thing to get people to use it, it’s another thing to start charging people.”

The stock’s rise may give LSEG CEO David Schwimmer more time and support to pursue a strategy focused on financial data and analytics to close the valuation gap. Some investors and analysts have called for “value-enhancing” actions, including an increase in the £3 billion (S$5.2 billion) share buyback program announced in February and even a spin-off of the London Stock Exchange run by LSEG.

LSEG stock trades at a forward P/E ratio of about 18 times, about 30% below Moody’s and 40% below MSCI, but more expensive than U.S.-listed data and analytics business FactSet.

“It’s actually quite cheap compared to other data companies,” said Benjamin Goy, an analyst at Deutsche Bank.

Of the 20 analysts covering LSEG, 90% rate the stock as a “buy” or “strong buy,” with none rating it a “sell.” On average, analysts expect LSEG stock to rise 35% over the next 12 months based on price targets.

LSEG has outperformed the UK blue-chip FTSE 100, little changed since Mr Elliott called for further action, while London-listed software and data providers Experian and Sage are up 5% and 2% respectively.

Asked for comment on its performance, LSEG pointed to previous statements that it had made “significant progress” in incorporating AI into its Workspace news and data platform.

LSEG is Reuters’ largest customer and provides news about Workspace and other products.

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Analysts said investors’ perception changed after LSEG announced full-year results on February 26 and released details about its Model Context Protocol (MCP) server, which supplies proprietary datasets to third-party AI agents and LLMs.

LSEG continued to mention growth and revenue opportunities from MCP Server in its first quarter trading update in April. Citing “rapid adoption” with more than 90 customer connections and 60 more in the pipeline, the company said first-quarter gross profit increased 9.8%, marking its best performance in more than five years.

“They are stepping up their communications and disclosures with a view to being part of the AI ​​ecosystem rather than competing with it,” said Hubert Lam, head of European specialty finance equity research at BofA Global Research.

Reuters previously reported that Elliott was pressuring LSEG to improve communication about AI threats, but declined to comment on its investment.

Linsell Train, one of LSEG’s top five shareholders, said in March that it was strengthening its position.

Nick Train, who manages the group’s UK equities portfolio, said in a note in May that the decline in the London-listed data, software and platform company’s share price could present a “once-in-a-decade opportunity to access exceptional growth assets at fundamentally the wrong price”.

Another top 30 shareholder, who also recently joined the ranks, said there is an opportunity for investors who believe the market is underestimating the value of intellectual property.

Investors still see the threat of AI technology.

“I don’t think the risk[of AI disruption]is minimal,” said Stephen Uy, chief investment officer at Blue Whale Growth Fund, which has a small stake in LSEG. He said companies may need to slim down and focus on their core businesses to become AI winners.

The development and realization of LSEG’s 10-year partnership with Microsoft also disappointed some investors, Reuters previously reported.

UBS’s Werner said the partnership is now less likely to drive the equity story than when it was announced in December 2022. He said expectations for the partnership have waned and investors’ focus has shifted to how LSEG will perform in an environment of increasing AI adoption among its customer base.

Most recently, LSEG was embroiled in a dispute over UK plans for a stock “tape” that could threaten LSEG’s data business by disclosing data that LSEG charges to investors. Reuters