Picture supply: Getty Photographs
International inventory markets positive have loved a robust run over the previous 5 years, with the S&P 500 up roughly 110%. In the meantime, the FTSE 100 has risen roughly 75%.
Nonetheless, with valuations in lots of US progress shares now wanting very stretched, market watchers are voicing issues a couple of potential correction. So it’s not unrealistic to anticipate the subsequent 5 years may deliver extra modest returns.
With the FTSE 100 much less dominated by high-flying progress corporations, I’m pondering it might be good to contemplate alternatives nearer to residence.
One I discover significantly compelling is London Inventory Change Group (LSEG).
An under-the-radar AI play
The corporate that runs the London Inventory Change (LSE) might not sound like a typical AI tech large, nevertheless it’s quietly constructing among the most vital AI-enhanced knowledge and analytics instruments within the UK.
That is executed through its Information & Analytics division (previously Refinitiv), which offers vital market knowledge infrastructure globally. Just lately, it introduced a collaboration with Anthropic to make its licensed monetary knowledge accessible through its Claude AI platform.
It’s additionally deepened its strategic partnership with Microsoft, enabling knowledge from the LSE to combine with Microsoft Copilot and Azure workflow instruments.
Monetary efficiency
The enterprise is at present rising from a dip, having reported natural earnings progress of seven.8% in Q1 2025. And it appears all its divisions have benefitted, together with Markets, up 10.7% and Danger Intelligence, up 10.7%.
In the meantime, the corporate executed £245m of its £500m share buybacks by April and reaffirmed steerage for 2025.
Earnings forecasts counsel about 17% annual progress over the subsequent three years, whereas 16 out of 19 analysts give the inventory a Sturdy Purchase ranking. With the shares recovering from lows close to £81 and already buying and selling round £97, I feel it’s a inventory price contemplating earlier than it takes off.
What are some dangers?
Despite the fact that the group provides promising publicity to knowledge and AI-driven progress, there are dangers price weighing. Its transformation from alternate operator to knowledge & analytics enterprise entails substantial funding, and any misstep may harm profitability
As well as, one among its smaller fairness investments, PrimaryBid, was written down by 87% in worth in 2025.
Regulatory modifications, data-licensing disputes or slower-than-expected AI adoption may all derail the thesis.
My verdict
With diversified companies in market infrastructure and a strategic give attention to world knowledge and analytics, London Inventory Change Group seems well-positioned for progress and recurring income.
Whereas previous efficiency isn’t a assure of future outcomes, its current efficiency has outpaced many friends and the underlying enterprise seems strong. That mentioned, any investor ought to preserve a detailed eye on how effectively its AI-driven knowledge technique executes and whether or not the corporate maintains margin growth.
Taking all this, I feel it’s price contemplating as a robust contender to outperform the S&P 500 over the subsequent 5 years.
But it surely’s certainly not the one contender. RELX, the worldwide data and analytics group, is equally compelling. It operates a diversified subscription enterprise in scientific, authorized and threat data that tends to be much less cyclical than pure tech.
An alternative choice is Sage Group, the UK-based software program firm specialising in accounting and enterprise administration options. It’s an amazing possibility for buyers hoping to use rising demand for digital transformation, cloud computing and Software program-as-a-Service (SaaS).
