S&P Global shares slide on weak 2026 forecast, AI concerns

By Pritam Biswas and Pragyan Kalita

Feb 10 (Reuters) – S&P Global forecast 2026 profit below Wall Street expectations on Tuesday, with growing investor unease over AI-driven disruption sweeping through the software and services sector, pushing its shares to their lowest in over two years.

The company is grouped within the broader software and services sector because its core operations, including financial data provision, analytics and credit ratings, rely heavily on proprietary datasets and advanced computational tools.

S&P was pulled into last week’s broader market downturn, as a bruising tech rout sparked by concerns over rapid AI advances and their potential to reshape parts of the software and services sector rippled across the market.

“The AI anxiety will likely linger, and the shares could be under pressure today unless there is a good explanation on the call,” said analysts at ClearStreet.

S&P expects adjusted per share profit for full-year 2026 in the range of $19.40 to $19.65, compared with analysts’ average estimate of $19.94, according to data compiled by LSEG.

For the fourth quarter, growth rate across several of its businesses, including ratings and indices, slowed over the year earlier.

Analysts at RBC Capital Markets said the stock was under pressure after ratings’ segment transaction revenue growth weakened and market intelligence revenue and margins fell short of expectations, alongside a softer full‑year outlook for both segments.

However, market intelligence was the only business unit that showed an increase in quarterly growth rate, analysts added.

SHARE DROP HITS PEERS

Shares of the analytics firm have dropped nearly 8% on the day and about 20% so far this year. FactSet Research and Moody’s were down more than 2% and 6%, respectively, as the pullback in S&P’s stock spilled over to its peers. Verisk and Nasdaq also declined.

“It remains unclear whether AI will ultimately depend on software infrastructure or replace it, but current market pricing is expressing the most bearish possible outcome, which we view as an overshoot at this time,” analysts at J.P.Morgan said in a note.

Some analysts, however, say that companies with proprietary data and benchmarks such as S&P Global could be largely insulated, and that AI-driven efficiency gains may still lift margins and help shift sentiment on the stocks.

The company mirrored the sentiment in a call with analysts.

S&P’s forecast comes even as global tech companies are ramping up bond issuance to fund the rapid build-out of AI infrastructure and cloud capacity that has buoyed demand for credit ratings.

The company posted fourth-quarter adjusted net income of $4.30 per share, while analysts estimated $4.33.

(Reporting by Pragyan Kalita and Pritam Biswas in Bengaluru; Editing by Shilpi Majumdar and Vijay Kishore)