UBS’ Top Tech Based Disruptive Stocks For 2030: Top 29 Stocks

10. Intercontinental Exchange, Inc. (NYSE:ICE)

Number of Hedge Fund Holders In Q2 2024: 70

Intercontinental Exchange, Inc. (NYSE:ICE) is one of the most consequential financial technology and services firms in the world. It owns and operates the illustrious New York Stock Exchange, which is the world’s most valuable stock exchange in terms of market capitalization. Consequently, Intercontinental Exchange, Inc. (NYSE:ICE)’s indisputable position on Wall Street as the go to medium for public listings provides it with a wide moat and reduces the threat from new entrants. However, unlike Nasdaq Inc which has managed to diversify its revenue, as of H1 2024, 62% of Intercontinental Exchange, Inc. (NYSE:ICE)’s revenue came from its exchange business. Consequently, the firm thrives when capital market conditions enable robust trading activity. In fact, Intercontinental Exchange, Inc. (NYSE:ICE)’s decision to spend $16 billion to buy data analytics provider Black Knight has still been unable to remove the domination of exchanges on its income statement. The firm benefits from the fact that it runs a wide variety of exchanges apart from the NYSE. These include bonds, futures, and others to introduce critical diversification within the exchanges revenue stream. In fact, Intercontinental Exchange, Inc. (NYSE:ICE) benefited from the diversification during the third quarter when energy trading volume grew by 23% annually and was driven by natural gas.

Third Point Management mentioned Intercontinental Exchange, Inc. (NYSE:ICE) in its Q2 2024 investor letter. Here is what the fund said:

“During Q2, we added to our position in Intercontinental Exchange, Inc. (NYSE:ICE). We originally invested in ICE in April 2023 when the FTC’s challenge to the company’s proposed acquisition of Black Knight impacted the share price. While the deal overhang has lifted, we believe a re-rating opportunity from a structural and cyclical acceleration of growth is still ahead. Importantly, we expect that AI will drive new growth opportunities across most of ICE’s businesses, extending the runway for value creation.

ICE is a collection of dominant information services and exchange assets that automate diverse and large asset classes (Energy, Mortgages, Fixed Income, Rates and Equities) while producing vast amounts of proprietary data. CEO Jeff Sprecher has led ICE for over 20 years. Under his visionary leadership, the company has compounded organic revenue and EPS at ~5% and ~15%, respectively, and adopted new modalities through organic investment and strategic acquisitions, most notably creating the flagship clusters of Energy and Mortgage, franchises we believe are of very high business quality. On the horizon, we expect an acceleration of growth to a consistent low double digit organic algorithm in these businesses, and a re-rating of the stock as price follows value creation…” (Click here to read the full text)”