Wolfe sees sentiment shift in business services stocks

Investing.com -- Business and information services stocks have gained ground in recent weeks, with the Wolfe Business and Information Services Index rising 4% month-to-date, compared to a 1% increase in the S&P 500 and flat performance in the S&P equal-weight index.

Wolfe Research said the movement may partly reflect capital flowing away from AI-related names such as semiconductors, which fell 11% month-to-date as measured by the SOXX index. The firm said investors appear less concerned about potential negative effects from artificial intelligence on the sector.

FactSet's (NYSE: FDS) fiscal third quarter 2026 results earlier this month showed early signs of monetization benefits from AI, according to Wolfe.

The firm said macro uncertainty was present during the second quarter, but underlying fundamentals including debt issuance, equity market performance, and lending volumes are stable or improving.

Wolfe named MSCI (NYSE: MSCI) and S&P Global (NYSE: SPGI) as top picks heading into the second quarter 2026 earnings season. For MSCI, the firm pointed to momentum in index recurring subscription sales and custom index adoption by hedge funds and banks. Rising equity markets are likely to boost asset-based fee revenue at both companies.

Second quarter debt issuance data signals potential upside to estimates at S&P Global, Wolfe said. The firm expects positive issuance trends to benefit Moody's (NYSE: MCO) as well, though it sees more room for guidance increases at S&P Global.

Wolfe said consensus estimates continue to underestimate pricing benefits at Fair Isaac (NYSE: FICO). The firm maintains a moderately positive view on TransUnion (NYSE: TRU) and Verisk (NASDAQ: VRSK) ahead of their earnings reports.

For the second quarter of 2026, Wolfe projects four companies will beat revenue estimates by more than 1%, with nine coming in line. On earnings per share, the firm expects seven companies to beat, four to be in line, and two to miss.

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