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The FTSE 100 is placing new heights as demand for reasonable UK shares soars. It’s a whisker away from 11,000, and will properly take out this key milestone in March. However not all blue-chip shares are retaining tempo.
Take Sage Group (LSE:SGE). This FTSE-listed firm plummeted in 2025, and hasn’t precisely obtained the present calendar 12 months off to a flyer. However may this mark a pretty dip-buying alternative for affected person buyers?
I feel so, and imagine it may rebound strongly in 2026. Right here’s why, together with a proof as to why it’s a prime inventory to think about.
Low-cost as chips
Like a whole bunch of software program shares the world over, Sage shares have toppled amid mounting worries over synthetic intelligence (AI) disruption. At 830p per share, they’re down 20% since 1 January. They’ve dropped greater than a 3rd over a 12 months (34%).
Has the market overreacted although? We’re nonetheless on the early phases of the AI revolution, so it’s laborious to make a definitive conclusion. However buyers are actually spooked, fearing companies will swap to cheaper alternate options for his or her accounting, payrolls and HR capabilities.
However right here’s the factor: after Sage’s worth correction, it’s potential that this hazard’s greater than mirrored in its rock-bottom valuation. In the present day, the tech large trades on a ahead price-to-earnings (P/E) ratio of 18.5 instances. That’s a way under the long-term common of roughly 31.
Is Sage AI-resistant?
In public a minimum of, the FTSE 100 firm’s placing on a courageous face. Actually, it argues that AI has strengthened its enterprise mannequin, not weakened it.
You is likely to be considering “ah, but of course the company would say that”! However early proof suggests it is likely to be onto one thing. Its natural gross sales development accelerated to 10% between October and December, which the corporate put right down to the combination of the Sage Copilot software in its merchandise.
Once more, these are early days. However I’m optimistic Sage can thrive within the AI period for a lot of causes. Accounting is a fancy, extremely regulated course of and topic to completely different legal guidelines throughout areas. This creates pure obstacles.
There’s additionally the belief difficulty — will companies need to give management to important processes like tax compliance to a brand new AI software? I’m not so certain. On this regard Sage holds a trump card, with a monitor file of offering dependable accounting options for the reason that early 80s.
The ultimate factor to recollect is that Sage’s merchandise aren’t that costly. Within the UK, its extra superior AI-assisted Accounting Plus package deal is simply £59 a month, plus VAT. At these costs, I’m undecided companies will up and go away in huge numbers, and particularly contemplating the factors we’ve mentioned.
A prime FTSE 100 share
So will Sage’s share worth rebound in 2026? I can’t make certain, naturally. None of us can. Nevertheless, I’ve a sense that fears over AI disruption right here could have been overblown, resulting in a possible worth restoration. For extra risk-tolerant buyers, I feel it’s a prime FTSE 100 inventory to think about.
