A sector in strategic transition

Stock exchanges are no longer judged purely on trading volumes or IPO cycles. Listed ones, in particular, are being asked to demonstrate how they are scaling recurring revenue, embedding technology across their models and maintaining relevance in a fast-moving ecosystem.

The equity story is evolving from that of a venue operator to infrastructure platform. Investors are increasingly rewarding those able to deliver durable, multi-dimensional growth that can hold up beyond the cycle.

The core strategic shift: Recurring, defensible, scalable

Scale, liquidity and efficiency remain foundational, but they are no longer enough. Today’s investor questions are sharper and more forward-looking:

  • What proportion of your revenue is recurring?
  • How integrated is your data and analytics business into customer workflows?
  • What makes your proposition competitive against fintechs and decentralised alternatives?

The most forward-leaning exchanges are not sidestepping these questions. They are using them as the starting point for their narrative.

FMI business models, reimagined through tech

Technology is no longer an enabler on the side – it is now central to how exchanges generate margin resilience and long-term customer value. The shift into data, cloud services and regtech is not an optional diversification, but a core driver of business model transformation.

Nasdaq is positioning itself as a mission-critical technology provider, evolving far beyond the role of operator. LSEG, through its strategic partnership with Microsoft, is now presenting as a data utility with embedded analytics, rather than simply a trading platform.

More broadly, exchanges are under pressure to show how they will stay sticky and relevant as the broader market environment shifts. Innovations such as artificial intelligence, tokenisation and decentralised finance are beginning to reshape both how information moves and how capital flows. The key investor question is not just about capability, but about future-fit strategy.

While technology underpins the margin story, strategic M&A helps define long-term positioning. These moves can support higher valuations, but only if they are clearly explained and backed by credible execution. Increasingly, investors are comparing exchanges to SaaS and data firms, not just to other financial institutions.

M&A as a narrative accelerator

Nasdaq’s acquisitions of Adenza and Verafin and LSEG’s takeover of Refinitiv are not just scale plays. They are designed to reshape how these companies are perceived, showing that exchanges can take ownership of a broader slice of the capital markets infrastructure stack.

But investors are watching more than just ambition. Integration risk, execution credibility and potential dilution remain central to the M&A debate. These transactions only earn a valuation premium if they enhance the quality of revenue, not merely its volume.

It is also worth noting that not all innovation comes through acquisition. Some of the most meaningful change stems from a willingness to rethink market structure and move quickly on opportunity.

24/7 Trading: Optionality or strategic risk?

Around-the-clock trading is being explored by Cboe, NYSE and newer entrants like 24X, while the market is keenly monitoring for any news of developments. For listed exchanges, the investor questions go beyond operational feasibility:

  • Will it expand TAM or dilute pricing power?
  • How will you manage cost vs. liquidity risk?
  • Can you do it better than competitors and monetise the infrastructure advantage?

This remains a strategic story in the making. It should be approached with pragmatism rather than promotional language.

Where the equity story is heading

To command a premium, listed exchanges will need to prove they are not just an operating infrastructure but also shaping the future of the capital markets. That requires:

  • A clear pathway to non-cyclical growth
  • Strong retention and pricing power in tech and data
  • A credible M&A strategy with operational delivery
  • A differentiated position on emerging markets and retail flow
  • Early, disciplined moves in adjacent spaces, like ESG and carbon markets
Final thought: Valuation will follow the vision

Ultimately, this messaging framework has relevance beyond exchanges. It’s a template for any company in transition, aiming to reassure long-term investors through:

  • A firm grip on both internal infrastructure and external dynamics
  • Reliable, visible income streams
  • A credible track record in execution and integration
  • Clear articulation of organic versus inorganic growth
  • A disciplined capital allocation story

In an increasingly volatile environment, financial market infrastructure providers are expected to be pillars of stability. The valuation premium will accrue to those who present themselves as indispensable platforms, not merely as operators. That means being able to explain revenue quality, prove execution discipline and articulate a vision that investors can back with conviction. Those who can do so will be valued like innovators. The rest risk being priced like utilities, even as they aspire to act like tech.