S&P Global Shares Dragged by Market’s “Most Bearish Possible” AI Anxieties

Core Viewpoint - S&P Global's fourth quarter earnings report revealed a revenue increase of 9% year-over-year, but the company's stock suffered a significant decline due to investor concerns over AI impacts, leading to a 9.7% drop in share price on the announcement day [1][3]. Financial Performance - Revenue for the fourth quarter reached $3.9 billion, aligning with Wall Street estimates, with the indices business seeing a notable 14% revenue increase [2]. - The ratings division also reported an 8% revenue growth during the quarter [5]. Future Outlook - S&P Global's forecast for 2026 indicates a slowdown in revenue growth, projected between 6.6% and 8.6%, down from 9% in the previous year [3]. Shareholder Returns - The company plans to return approximately 85% of its free cash flow to investors in 2025, with $6.2 billion allocated for shareholder rewards, including $1.2 billion in dividends and $5 billion in share buybacks [3]. - The current share price of $444 is significantly below the average analyst target price of $615, suggesting a potential upside of around 38% [3]. Market Reaction - S&P Global's shares have declined over 23% year-to-date, reflecting broader market anxieties related to AI [3]. - Analysts from JPMorgan characterized the market's reaction as an overreaction, indicating uncertainty about the long-term implications of AI on software infrastructure [5].