The London Stock Exchange Group (LSEG) saw its shares climb after announcing a record £3 billion share buyback and raising its dividend. However, underlying investor sentiment, as highlighted on the Bloomberg Stock Movers podcast, remains focused on the company's evolving "LSEG AI strategy 2026" and how it plans to mitigate AI-related risks to its lucrative data business. This comes weeks after activist investor Elliott Investment Management took a stake, pushing for a larger buyback and greater clarity on LSEG's AI future.
LSEG's data division accounts for roughly half its revenue, and concerns persist that advanced AI models could directly compete with its data and analytics distribution services. Elliott has urged LSEG to articulate how it can leverage AI as a beneficiary, rather than viewing it solely as a threat. Despite positive market reactions to the buyback and guidance, the long-term implications of AI on LSEG's core business require further strategic clarity.
Elsewhere in the market, French utility Engie's shares jumped following a significant UK acquisition. The company secured UK Power Networks, the largest power distribution network in the UK, for £10.5 billion. This strategic move aligns with Engie's broader effort to capitalize on surging electricity demand, driven by electric vehicles and data centers, while reducing its exposure to volatile fossil fuel assets in favor of renewables infrastructure. The market, including JP Morgan analysts, views the deal positively, anticipating both qualitative and quantitative improvements in Engie's earnings.
Schneider Electric also posted a strong performance, with shares up 3.6% on robust earnings. The electrical equipment giant is directly benefiting from the booming data center market, a key component of the AI infrastructure build-out. Schneider expects sales and profit to rise considerably by 2026, driven by record 2025 sales in its data center segment. This trend is mirrored across the sector, with hyperscalers planning a combined $650 billion in data center investments this year alone. Much of this capital will flow to providers like Schneider Electric for server racks, cooling technologies, and electrical equipment, ensuring continued growth.
