The FTSE 100 had a remarkable year in 2025, significantly surpassing the performance of the S&P 500. James Beard explores the factors behind this success and ponders its sustainability.
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Performance Comparison with S&P 500
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The FTSE 100 continues to surge forward. In early January, it surpassed the 10,000 mark for the first time ever. Since the beginning of 2026, it has increased by almost 10%. If this momentum persists, it could hit 11,000 within a few weeks (by 13 March).
If this occurs, it will mark the quickest increase of 1,000 points since the index debuted in January 1984. What factors are fueling this surge? And can it be sustained? Let’s explore.
Factors Driving Market Success
Revitalized excitement
The index is primarily composed of companies that might, somewhat harshly, be labeled as traditional.
Financial institutions, suppliers of industrial products and services, along with mining companies, represent 36% of the FTSE 100’s total value. As prices for precious metals surge and worries about the potential impact of artificial intelligence (AI) on certain industries grow, these asset-rich stocks are once again attracting the interest of investors.
Sustainability of Recent Gains
Specifically, it seems that the more conventional stocks within the FTSE 100 are gaining from the current uncertainties surrounding the impact of AI on data and software firms.
Interestingly, the entity responsible for managing the index – the London Stock Exchange Group (LSE:LSEG) – is among those affected by the repercussions. Since February 2025, the stock has plummeted by 27%.
On February 3rd, the stock fell by 12.8% following the announcement that the AI firm Anthropic had introduced a range of plugins designed to handle routine tasks. Although the American company has yet to create anything that poses a significant risk to the London Stock Exchange Group, the trend is raising concerns among investors.
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This is due to the fact that the organization also offers data, analytics, and services for risk management.
A chance or a risk?
Nonetheless, I perceive the extensive data repository of the group as an asset that will likely enable it to counter the challenges posed by these AI technologies. In fact, it can be quite difficult to grasp the sheer volume of information it possesses.
The organization claims that its ‘Tick History – PCAP’ database for “exceptionally high-quality” global market data contains 80 petabytes of data, which is comparable to 1.6 billion filing cabinets filled with paperwork. Each day, its real-time data service delivers over 230 billion messages.
Information of this nature can be highly beneficial to clients, which explains why they are willing to pay a premium for access. Additionally, the cost of sharing it with another user is quite low. In 2025, it was reported to have a gross profit margin exceeding 90%. The company also takes pride in its precision. Anyone familiar with AI tools understands that they can still make mistakes.
Currently, I don’t perceive any urgent danger to the business of the group. In fact, I believe the decline in share prices due to AI is a chance to buy. As of now (1 March), it is valued at an appealing 20 times its adjusted earnings for 2025. I think it’s premature to dismiss the London Stock Exchange Group. Therefore, I believe it deserves some consideration.
Gazing forward
Naturally, it’s impossible to definitively ascertain if the FTSE 100 will hit 11,000. Moreover, if it does reach that milestone, predicting the subsequent outcomes becomes even more challenging.
Historical trends indicate that the index is likely to keep rising. It began at 1,000 and has consistently increased despite various economic challenges, international conflicts, Brexit, and a global pandemic. This is why I am convinced that investing in the stock market is the most effective method for accumulating long-term wealth.
