Nasdaq's less flashy side—its software and data businesses—is increasingly driving the company's growth, and analysts are taking notice. UBS, a global investment bank, lifted its 2026 earnings-per-share forecast for Nasdaq to $4.09, citing strong demand for artificial intelligence-powered data and analytics tools, along with faster revenue from its Verafin anti-fraud platform as big deals come online.
What's behind the upgrade?
UBS's move follows Nasdaq's second-quarter results, which showed that the company's solutions segment—which includes data products, analytics, and anti-financial-crime software—is gaining momentum. The bank highlighted two key drivers: AI-driven demand for data and analytics, and Verafin, a platform that helps banks and credit unions detect money laundering and fraud. Verafin's revenue is accelerating as larger financial institutions sign on, bringing bigger contracts.
Nasdaq is best known for running stock exchanges, but its solutions business has become a significant part of its revenue mix. This segment is less tied to trading volumes and market volatility, making it a more predictable earnings stream. For everyday investors, that means Nasdaq's financial health is becoming less dependent on whether markets are up or down.
Why Verafin and data matter
Verafin, which Nasdaq acquired in 2021 for $2.75 billion, is a cloud-based platform that helps financial institutions spot suspicious activity. As regulators tighten anti-money-laundering rules, banks are spending more on compliance technology. Verafin's ability to land large deals—especially with big banks—is a key reason UBS sees faster revenue growth ahead.
Nasdaq's data and analytics business, meanwhile, benefits from the boom in artificial intelligence. Financial firms use Nasdaq's data to train AI models for trading, risk management, and investment decisions. The more institutions adopt AI, the more they need high-quality, real-time data—a trend that plays directly into Nasdaq's strengths.
This isn't the first time analysts have flagged Nasdaq's solutions business as a growth engine. Earlier this year, Morgan Stanley raised its earnings forecasts for the company, also pointing to AI, tokenization, and extended trading hours as catalysts. The consensus is building that Nasdaq's shift toward recurring, high-margin revenue is paying off.
What it means for investors
For everyday investors, the key takeaway is that Nasdaq is becoming more than just a stock exchange. Its solutions business offers a more stable revenue base, which can support earnings growth even when trading activity slows. UBS's $4.09 EPS estimate for 2026 implies confidence that this trend will continue.
However, investors should keep an eye on execution risks. Verafin's big-deal pipeline is promising, but large contracts can be lumpy—one quarter might see a surge, the next a lull. Similarly, AI-driven demand is real, but competition in data and analytics is fierce, with rivals like S&P Global and MSCI also vying for institutional clients.
Nasdaq's stock has had its ups and downs this year, with AI spending doubts weighing on tech stocks at times. But the solutions business provides a buffer. If Verafin and data analytics continue to deliver, Nasdaq could outperform expectations—even if market volumes stay flat.
The bigger picture
Nasdaq's pivot to solutions is part of a broader trend among exchange operators. Companies like the London Stock Exchange Group and CME Group have also been building out data and analytics arms, seeking to diversify away from transaction fees. For Nasdaq, the strategy is working: solutions now account for a growing share of total revenue, and margins are improving.
UBS's upgrade is a vote of confidence that this transformation has legs. For investors, it's a reminder to look beyond the headline—Nasdaq isn't just a market operator anymore. It's a technology company that happens to run exchanges.
