By Paul R. La Monica
Don't prepare for a complete AI takeover just yet.
Goldman Sachs says the fears of obsolescence for some software and data services companies might be overdone.
The threat of disruption from artificial intelligence models like OpenAI's ChatGPT and Anthropic's Claude has already led to a pullback this year in the stocks of several prominent software and data provider firms, such as SAP and LexisNexis owner RELX. The iShares Expanded Tech-Software Sector exchange-traded fund has plunged nearly 20% this year.
But Goldman analysts say the steep drop in valuations for information services stocks doesn't reflect customers' actual behaviors, but "a worst case disruption scenario."
Services firms with a focus on proprietary data and regulatory compliance that are entrenched in their customers' workflows "remain difficult to replace," according to the Goldman analysts.
With that in mind, Goldman said Verisk, a data analytics firm that caters to the insurance industry and whose stock has tumbled more than 20% so far in 2026, should hold up well.
The analysts also like credit score companies Equifax, TransUnion, and Fair Isaac, which have each fallen sharply this year. Goldman is also bullish on financial data and index providers, namely Moody's and MSCI,
as well as S&P Global, a Barron's stock pick this year. And news and data provider Thomson Reuters, down 33% this year, is "materially oversold," the analysts aadded.
Valuations have plummeted due to AI worries. S&P Global, which reported earnings Tuesday that topped forecasts, now trades for less than 23 times earnings estimates for the next 12 months, down from a price-to-earnings ratio of 30 in January. Equifax's forward P/E has slid to just 20 from 30 in January, while TransUnion's multiple has dropped to a current level of 15 from 20 earlier this year.
But the Goldman analysts say the multiple compression is unwarranted because earnings estimates have been stable. In fact, full-year earnings forecasts for Fair Isaac, MSCI, and Moody's are higher now than they were at the end of December.
Others point out that investors might be too focused on the possible negative impacts of AI on software firms and data service providers, and aren't paying enough attention to the potential for AI to give a lift to these businesses.
"Markets seem to be discounting AI-induced productivity growth," said analysts at 22V Research in a report Tuesday. They noted that ServiceNow and IBM, two software companies that were hit hard following their latest quarterly results, are examples of companies that "have begun quantifying margin improvements from AI this earnings season." 22V Research included exchange owner Nasdaq as another AI margin winner.
Still, there are other pockets of the services sector where AI worries are more legitimate, the Goldman analysts warned. They said that FactSet Research Systems, scientific and academic data company Clarivate, and consulting firm Gartner are "more vulnerable to AI-enabled substitution."
The Goldman analysts even cut their rating on Gartner to Neutral, citing worries that the "business faces structurally higher AI risk" due to concerns that "AI is increasingly capable of replicating large portions of generalized research synthesis."
In other words, any company that currently provides a service which could become commoditized because of AI is in trouble. But the massive selloff for other software and services stocks seems to be an overreaction.
Write to Paul R. La Monica at paul.lamonica@barrons.com
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April 28, 2026 14:25 ET (18:25 GMT)
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