LSEG Shares Surge 7.4% After JPMorgan and Goldman Sachs Defend Stock

TLDR

• LSEG shares rose by 7.4% on Thursday after a 19% drop in the previous two days.
• JPMorgan and Goldman Sachs reassured investors by downplaying AI risks to LSEG’s business.
• JPMorgan’s Enrico Bolzoni clarified that AI companies are working with LSEG, not replacing it.
• LSEG’s partnership with Anthropic provided AI access to the company’s financial data.
• Goldman Sachs analyst Oliver Carruthers set a price target of 14,550 pence for LSEG.

LSEG shares bounced back on Thursday, rising by 7.4% after facing a 19% drop in the prior two days. The rally followed reassurances from major financial institutions, JPMorgan and Goldman Sachs, who downplayed fears that artificial intelligence would threaten LSEG’s core business. The recovery came after a tumultuous period where AI-related market panic had hurt the stock.

London Stock Exchange Group plc, LSEG.L

Rebound Driven by Analyst Confidence

The sharp decline in LSEG shares began earlier in the week when Anthropic introduced its Claude Cowork product, designed to automate workplace tasks. Traders feared that AI advancements could severely impact companies like LSEG, which specializes in providing financial data, not software. However, JPMorgan’s Enrico Bolzoni stepped in to correct what he called “misunderstandings” surrounding LSEG’s business model, stating that AI would not replace but instead work alongside LSEG.

Bolzoni emphasized that LSEG is deeply involved in AI, noting the October partnership with Anthropic that provided the AI company access to LSEG’s financial data. This partnership, he argued, demonstrated LSEG’s pivotal role in the growing AI landscape, counteracting the market’s misconception that AI would push the company aside. “AI companies are working with LSEG, not replacing it,” Bolzoni clarified in his statement.

LSEG Shares: Calm After the Panic

Goldman Sachs also weighed in, with analyst Oliver Carruthers reiterating the value of LSEG’s data-driven business model. Carruthers downplayed the potential impact of AI, explaining that just 6% of LSEG’s revenue from workflow products might be exposed to any risk from automation. He further set a price target of 14,550 pence, which was the highest among analysts tracking LSEG.

The comments from both JPMorgan and Goldman Sachs played a significant role in calming investor nerves. Shares of LSEG, which had taken a hit in the wake of AI-related concerns, saw a sharp reversal, rising 7.4%. This bounce was a direct result of analysts stepping in to assure the market that LSEG’s core business was secure, even in the face of AI innovation.

The broader tech market also saw turbulence as fears over AI’s impact on the software and data sectors took hold. The Nasdaq 100 recorded its worst two-day drop since October, shedding over $550 billion in value. LSEG, despite being a data provider, became caught in the broader selloff, with tech investors looking to offload anything related to software or data businesses.