Moody's executives dismiss AI fears after upbeat 2026 forecast, shares rise

By Utkarsh Shetti

Feb 18 (Reuters) - Moody's MCO.N on Wednesday highlighted the proprietary nature of its data to reassure investors worried over potential disruptions from AI-related advances and forecast an upbeat annual profit, sending its shares up more than 6%.

The ratings agency's stock was bruised by a rout earlier this month that extended from software firms to Wall Street brokerages, sectors perceived as vulnerable to automation. Moody's shares had fallen over 17% in 2026 alone.

"A lot of the data just simply isn't available to the public. We have a complex ecosystem of commercial agreements and IP rights that has taken us decades to build, and we're constantly curating that," CEO Rob Fauber said on a call with analysts.

Peer S&P's shares fell sharply earlier this month after it projected a weak annual profit. Its shares were up 2.6% on Wednesday.

Some analysts have said the AI-related concerns may be overstated and companies like Moody's could still benefit from a boost in efficiency driven by the technology.

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The bond market has seen a pickup in activity, especially as tech heavyweights ramp up issuance to fund their investments in artificial intelligence infrastructure, buoying demand for credit ratings and driving growth at firms like Moody's.

"In the fourth quarter alone, we rated more than $70 billion of issuance for companies including Alphabet GOOGL.O, Amazon AMZN.O, and Meta META.O, in part related to their AI investment programs," Fauber said.

Its MIS arm, which provides credit rating services, reported a 17% rise in fourth-quarter revenue to $946 million.

Moody's expects full-year adjusted profit per share between $16.40 and $17.00, surpassing analysts' average expectations of $16.38, according to data compiled by LSEG.

It also beat estimates for adjusted profit in the fourth quarter, posting $3.64 per share, compared with the $3.42 per share that analysts expected.