Experian and Relx Slide as AI Fears Trump Record Results

The twin sell-off, which left both stocks among the biggest fallers on the FTSE 100, illustrates a growing unease in London's institutional investor base. Companies that sit at the intersection of AI opportunity and AI threat are being repriced, and generous capital returns alone are not closing the gap.

For the thousands of UK businesses that rely on Experian for credit checks or on Relx's LexisNexis platform for legal and business intelligence, the market's verdict carries a practical signal: the pricing power these suppliers have long enjoyed may be eroding.

Record numbers, record doubt: what the sell-off says

Experian's full-year update, published on Wednesday, landed at the upper end of guidance. The company described FY26 as a "record year," according to its London Stock Exchange filing. It announced a $1bn capital return programme alongside the results.

None of it was enough. The stock fell almost 7 per cent to 2,557p, making it the single largest decliner on the blue-chip index.

Adam Vettese, market analyst at eToro, called the update "more of the same," noting that the results were "solid but uninspiring" and that investors "appear to have been hoping for a sharper acceleration or more bullish 2027 outlook," as reported by City AM.

According to analysis from Jefferies, strong revenue growth in Latin America was offset by slowing business-to-consumer performance in North America. The broker described Experian's FY27 guidance as "characteristically conservative," with projected net interest costs of $250m to $260m and a tax rate of around 26 per cent representing what it termed a "partial headwind."

Relx, meanwhile, had already flagged its own confidence with a £2.25bn capital return announced at its February results, up from £1.5bn previously. That did not insulate it from Wednesday's selling. The stock fell 3.5 per cent to 2,438p.

Earlier in May, Morgan Stanley downgraded Relx to "hold" from "overweight." Analyst George Webb cut the price target from 3,320p to 2,970p, citing competition from start-up rivals using AI, as first reported by City AM.

The dual-edged AI problem for data incumbents

Both Experian and Relx have been vocal about the benefits AI is delivering to their own operations. In Wednesday's filing, Experian stated that AI "is becoming a core driver of how we operate and grow," reporting a 10 to 15 per cent uplift in coding productivity in FY26, with select areas exceeding 30 per cent. The company said it had identified over $15bn in AI-enabled addressable market opportunities.

Relx has made similar arguments. At its annual results in February, Erik Engstrom, Relx's chief executive, said the "continued evolution of artificial intelligence is enabling us to add more value to our customers" and to "develop and launch products at a faster pace, while continuing to manage cost growth below revenue growth."

The trouble is that the same technology enabling these efficiency gains also threatens to commoditise the products themselves. Large enterprise customers, particularly banks, law firms, and insurers, are increasingly building in-house AI capabilities that can replicate some of the analytical layers Experian and Relx charge for. The raw data remains proprietary, but the interpretation and delivery of that data, historically a high-margin service, is becoming contestable.

Morgan Stanley's downgrade of Relx was explicitly rooted in this logic. Webb's note pointed to competition from AI-native start-ups as a reason to reassess the stock's premium rating.

Matt Dorset, equity research analyst at Quilter Cheviot, observed: "Experian now trades on around 18-times next-twelve-month earnings, well below its 10-year average following a derating linked to AI disruption concerns. While those fears are unlikely to disappear quickly, we expect management to push back on some of that narrative."

The question is whether pushing back will be sufficient. A company trading well below its historical multiple, despite posting record results, is a company whose narrative has shifted in the eyes of the market.

What this means for businesses that buy from Experian and Relx

For SME and scale-up leaders who purchase credit data, risk analytics, or legal research from these providers, the derating carries implications beyond share prices.

First, it signals that the City believes these companies' pricing power is under threat. If that assessment proves correct, it could eventually translate into more competitive pricing, bundled AI-enhanced products, or greater willingness from incumbents to negotiate on contract terms. Neither outcome is guaranteed, but the direction of travel is notable.

Second, it opens a window for smaller, AI-native competitors. Start-ups that can offer narrower but cheaper data products, built on large language models trained on publicly available or licensed datasets, may find it easier to win business from cost-conscious buyers. The Morgan Stanley downgrade of Relx specifically cited this dynamic.

Third, it raises a procurement question. Businesses locked into multi-year contracts with large data providers may want to assess whether emerging alternatives could serve part of their needs at lower cost. That does not mean abandoning established suppliers; Experian's proprietary credit bureau data, for instance, has no direct substitute. But ancillary analytics and reporting layers may be increasingly replicable.

The procurement calculation

The practical calculus for a finance director or operations lead is straightforward. Where a data provider's value rests on proprietary, regulated datasets, such as consumer credit files, switching costs remain high and alternatives scarce. Where value rests primarily on aggregation, search, and interpretation of semi-public information, the competitive moat is narrower, and AI-native entrants have a credible path to market.

Understanding which category each line item on a data services invoice falls into is likely to become a more important exercise over the next two to three years.

Valuation reset or structural decline?

The central debate in the City is whether Wednesday's sell-off represents a temporary valuation reset or the beginning of a more permanent repricing.

The bull case is that Experian and Relx possess decades of proprietary data, regulatory moats, and deep customer relationships that no AI start-up can replicate overnight. Experian's $15bn addressable market claim, if even partially realised, would more than offset any margin compression from AI competition. The $1bn buyback and Relx's £2.25bn return programme demonstrate confidence and provide a floor under earnings per share.

The bear case is that AI is a deflationary force for information services. As models become more capable, the analytical premium that data incumbents charge will compress. Customers who once paid for curated insights will increasingly generate their own. The derating from historical multiples, in this reading, is rational and may have further to run.

Vettese noted that the sell-off also reflects sensitivity to "cyclical risks and cautious market mood," with softer UK and EMEA credit markets weighing on sentiment alongside the structural AI concerns.

Neither thesis is settled. What is clear is that the market is no longer willing to award these businesses the benefit of the doubt, even when the numbers are strong. For operators who depend on their services, that shift in sentiment is worth watching closely, not because it changes what Experian or Relx deliver today, but because it may reshape what they are willing, or forced, to offer tomorrow.