RELX Is the Best AI Stock You're Not Buying

Summary

RELX shares have fallen roughly 40% from their 52-week high, crushed by a sentiment-driven "AI disruption" panic that began when Anthropic launched a legal workflow tool in February. Underneath the sell-off, the business is accelerating: 2025 delivered 7% underlying revenue growth, 9% profit growth, margin expansion to 34.8%, and 99% cash conversion. At a forward multiple well below its historical norms — with a five-year average in the low 30s versus a current forward P/E in the high teens — the market is mispricing the durability of RELX's data moats and the monetization potential of its own AI products. The just-launched Lexis+ with Protégé platform, a £2.25 billion buyback, and the H1 results on July 23 provide multiple near-term catalysts.

The Market Is Punishing the Wrong Layer

RELX's stock has become a punching bag for every investor anxious that generative AI will eat the enterprise software stack. The trigger was specific: Anthropic's announcement of a specialized legal tool for its Claude Cowork agentic desktop application sent Thomson Reuters shares down roughly 18% and RELX down about 14% in a single session in early February. The most recent blow landed days ago, when Morgan Stanley downgraded RELX from Overweight to Equal Weight, citing competition from AI-powered workflow startups and triggering another leg down.

My argument is simple: the market is confusing the interface layer — where AI chatbots and plugins operate — with the infrastructure layer, where RELX's competitive advantage actually resides. RELX does not sell a pretty front-end. It sells decades of curated, verified, proprietary datasets, legal citation networks (Shepard's), regulatory compliance databases, and machine-to-machine risk decisioning that processes hundreds of millions of transactions daily. A general-purpose AI tool cannot replicate what it does not have lawful access to in the first place.

Several analysts have drawn the same distinction. Nick Dempsey, Barclays' director of media equity research, has questioned whether general AI...