The FTSE 100 is feeling the heat as war erupts in Iran, falling more than 5% in just five days. Yet one top growth stock has continued its recent recovery. Can it keep defying today’s volatile market?
The company in question is RELX (LSE: REL), which provides analytics tools to the finance, legal, and scientific industries. Its shares climbed almost 4% in the last turbulent week and are up nearly 17% over the month. The only FTSE 100 stock to do better in that time is Schroders, its shares boosted by a US takeover.
RELX has also been under pressure after markets decided artificial intelligence might swallow its business model and spit out the bones. The release of an AI-powered productivity tool for companies’ in-house legal teams by US firm Anthropic hammered UK data and analytics stocks across the board. Pearson, Informa, Experian, and London Stock Exchange Group all plunged.
The big concern is that AI could render their proprietary software redundant.
RELX shares are climbing
This isn’t the first wave of AI anxiety to hit the sector. During the initial panic in 2023, companies argued they could turn the technology to their advantage by incorporating AI into their platforms. This time, they’re arguing that AI simply cannot replace the extensive proprietary data they hold. Instead, they argue it relies on it.
For now, bargain hunters appear to be outnumbering panic sellers, and the sector is staging a tentative recovery. RELX in particular has bounced back strongly.
So far, I’ve been sitting this one out. I simply don’t have the technical knowledge to judge how serious the AI threat really is. I’m guessing it’s been overplayed, as in my experience AI simply cannot be relied upon. But I’m concerned that even the possibility of disruption could cast a shadow over the RELX share price.
Profits and revenue climb again
The company published a strong set of full-year results on 12 February, with adjusted operating profit up 9% to £3.3bn and underlying revenue climbing 7% to £9.6bn. To soothe worried shareholders, the board increased the full-year dividend by 7% and announced a higher £2.25bn share buyback for 2026.
The issue is that those results relate to last year, when AI didn’t appear to pose such a direct threat. Investors are worrying about the future. Yet many can also see a buying opportunity here, and are hungry to take advantage, even in the midst of today’s market volatility.
Despite the recovery, the RELX share price is still down around 30% over the last year. Its price-to-earnings ratio has fallen from above 30 to roughly 20. By recent standards, that’s like a bargain. I’ve waited three years for this opportunity. There’s a problem though.
RELX feels like a binary bet. I’m sorely tempted to buy the shares, and think they’re worth considering for brave investors. Yet right now, my focus is on FTSE 100 stocks that have been hammered by the current crisis. They face the same broader market risks as everyone else, but without the specific worry facing RELX. I might kick myself though.
