AI Bear Case Continues to Weigh on Information Services Stocks
Shares slide as Anthropic plug-in and Gartner outlook weigh on data and ratings firms.
In intraday trading on Feb. 3, a broad group of information-services companies, such as rating agencies, data providers, index providers, credit bureaus, and others, are seeing share price declines of 5% or more.
Why it matters: We attribute this to two factors. First, Anthropic released an artificial intelligence-enabled plug-in designed to automate legal workflows. Second, Gartner posted a disappointing revenue and earnings per share outlook. It expects 2026 revenue of $6.46 billion (FactSet consensus: $6.71 billion) and adjusted EPS of $12.30 (consensus: $13.53).
- While there have been many AI-focused startups in the legal space, Anthropic’s plug-in suggests that its models can be customized for a specific industry. As a result, bears fear that models such as Anthropic will disrupt a host of information-services verticals.
- Gartner’s second-quarter results last year appeared to be a tipping point for the AI bear case on information-services stocks. While that weak quarter may have been affected by a weaker macroeconomic outlook and the loss of some government revenue, the shares dropped 28% that day (Aug. 5) on fears that the rise of generative AI was eating into the firm’s core insights business.
The bottom line: We are maintaining our fair value estimates and moat ratings for our information-services stocks, including rating agencies (Moody’s MCO, S&P Global SPGI), index providers (MSCI MSCI), data providers (Verisk VRSK, FactSet FDS), and credit bureaus/scores (Equifax EFX, TransUnion TRU, Experian EXPN, and Fair Isaac FICO).
Long view: We view wide-moat-rated firms with proprietary and mission-critical data, as well as those with network effect-driven benchmark businesses, as mostly insulated from AI disruption-related risk.
- For example, we see credit ratings, indexes, Verisk’s insurance data, and FICO scores as benefiting from a network effect. Even if a better solution emerges, their use in contracts and in the capital markets would require complex coordination to disrupt, in our view.
Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
United States