While the sell-off has been brutal, some investors are sticking with the company – at least for now.
Kothari said LSEG could succeed in an AI world and there was unlikely to be a stampede towards the latest AI tools.
“We have to remember that however good the technology, it is humans that will need to decide whether to adopt it – and they need to be comfortable doing that. Typically that takes longer than you think,” he said.
Niall Gallagher, a fund manager from Jupiter, added: “I’ve lived through numerous ‘hype cycles’ before – including the 1998 to 2000 TMT bubble – and whilst technology does change the world, it doesn’t happen overnight.”
Gallagher said that LSEG’s core strength was the data it owned that wasn’t available elsewhere and which AI couldn’t replicate.
“This does not mean that every single data set or data process inside of LSEG could not be replicated more cheaply by AI, but we do think there is a strong moat,” he said.
The jury is out on whether Schwimmer’s pivot to data will bear fruit and if the company’s share price will again hit the heady heights of last year.
However, there are concerns LSEG will struggle to escape the perception that it has found itself on the wrong side of the AI boom.
“This situation has become slightly self-fulfilling because LSEG achieved this branding as an AI loser,” said Ben Bathurst, an analyst at RBC Capital.
“What we find is that in the vast majority of our conversations with participants in the market, with investors or prospective investors in LSEG, it’s widely understood that the sell-off is overdone.
“The issue is, it’s very hard to disprove some of these arguments in the short term because we’re talking about something that’s quite long-term in nature.”