1 FTSE 100 share I predict will outperform the S&P 500 over the next 5 years
Global stock markets sure have enjoyed a strong run over the past five years, with the S&P 500 up roughly 110%. Meanwhile, the FTSE 100 has risen approximately 75%.
However, with valuations in many US growth stocks now looking very stretched, market watchers are voicing concerns about a potential correction. So itâs not unrealistic to expect the next five years might bring more modest returns.
With the FTSE 100 less dominated by high-flying growth companies, I’m thinking it may be smart to consider opportunities closer to home.
One I find particularly compelling is London Stock Exchange Group (LSEG).
An under-the-radar AI play
The company that runs the London Stock Exchange (LSE) may not sound like a typical AI tech giant, but it’s quietly building some of the most significant AI-enhanced data and analytics tools in the UK.
This is done via its Data & Analytics division (formerly Refinitiv), which provides critical market data infrastructure globally. Recently, it announced a collaboration with Anthropic to make its licensed financial data accessible via its Claude AI platform.
It’s also deepened its strategic partnership with Microsoft, enabling data from the LSE to integrate with Microsoft Copilot and Azure workflow tools.
Financial performance
The business is currently emerging from a dip, having reported organic earnings growth of 7.8% in Q1 2025. And it seems all its divisions have benefitted, including Markets, up 10.7% and Risk Intelligence, up 10.7%.
Meanwhile, the company executed £245m of its £500m share buybacks by April and reaffirmed guidance for 2025.
Earnings forecasts suggest about 17% annual growth over the next three years, while 16 out of 19 analysts give the stock a Strong Buy rating. With the shares recovering from lows near £81 and already trading around £97, I think itâs a stock worth considering before it takes off.
What are some risks?
Even though the group offers promising exposure to data and AI-driven growth, there are risks worth weighing. Its transformation from exchange operator to data & analytics business involves substantial investment, and any misstep could hurt profitability
In addition, one of its smaller equity investments, PrimaryBid, was written down by 87% in value in 2025.
Regulatory changes, data-licensing disputes or slower-than-expected AI adoption could all derail the thesis.
My verdict
With diversified services in market infrastructure and a strategic focus on global data and analytics, London Stock Exchange Group appears well-positioned for growth and recurring revenue.
While past performance isnât a guarantee of future results, its recent performance has outpaced many peers and the underlying business appears robust. That said, any investor should keep a close eye on how well its AI-driven data strategy executes and whether the company maintains margin expansion.
Taking all this, I think it’s worth considering as a strong contender to outperform the S&P 500 over the next five years.
But it’s by no means the only contender. RELX, the global information and analytics group, is similarly compelling. It operates a diversified subscription business in scientific, legal and risk information that tends to be less cyclical than pure tech.
Another option is Sage Group, the UK-based software company specialising in accounting and business management solutions. It’s a great option for investors hoping to exploit growing demand for digital transformation, cloud computing and Software-as-a-Service (SaaS).
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Mark Hartley has positions in RELX. The Motley Fool UK has recommended Microsoft, RELX, and Sage Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
