Is Intercontinental Exchange (ICE) Trading at a Compelling Valuation?

L1 Capital , an investment management firm, released its "L1 Capital International Fund" (unhedged) second-quarter 2026 investor letter. A copy of the letter can be downloaded here . The letter discusses the current investment environment as a 'two-speed' but resilient global economy, accompanied by an uncertain future. The letter explores the potential of an AI bubble, distinguishing between strong fundamentals and speculative momentum. Additionally, the market displays a 'narrow' character, marked by high exuberance and pronounced over-pessimism. Against this backdrop, the Fund returned +2.6% (net of fees) during the June 2026 quarter, compared to the benchmark return of +12.5% (all in A$). The underperformance was driven more by which investments were not held in the Fund. The Fund remains focused on quality, valuation and the avoidance of permanent capital loss, and believes the portfolio is positioned to deliver attractive risk-adjusted returns for patient investors. In addition, you can check the Fund's top five holdings to know its best picks in 2026.

According to L1 Capital International Fund's Q2 2026 investor letter, Intercontinental Exchange, Inc. (NYSE: ICE ), a US-based financial services company that provides technology, data, and market infrastructure to financial institutions, corporations, and government entities, detracted from the performance. On July 17, 2026, Intercontinental Exchange, Inc. (NYSE:ICE) closed at $139.65 per share, reflecting a market capitalization of $78.97 billion. Intercontinental Exchange, Inc. (NYSE:ICE) posted a one-month return of 6.33%, and its shares lost 22.76% over the past 52 weeks.

L1 Capital International Fund stated the following regarding Intercontinental Exchange, Inc. (NYSE:ICE) in its Q2 2026 investor update:

"Intercontinental Exchange, Inc. (NYSE:ICE) is an example of a high quality business that is not particularly AI-sensitive (positively or negatively) that we assess to be trading at a compelling valuation. ICE is trading on a forward price to earnings ratio of around 17x, a level we have not seen since the GFC.

ICE has been a long-term holding of the Fund, and we have discussed the investment on many prior occasions. In our view, not much has changed. There are some market concerns around the impact AI may have on the number of people using ICE's proprietary data and analytics. We think this is a peripheral issue and unlikely to materially impact ICE. The larger market concern is that the Commodity Futures Trading Commission (CFTC), which regulates many of ICE's markets, may authorise 'perpetual' derivatives and encourage competition in products such as crypto that could compete with established regulated exchanges.

As a brief aside, the CFTC situation is highly unusual. Normally there are five commissioners with no more than three from the same political party. Today, following a series of resignations, there is only one, Michael Selig, appointed by President Trump. Selig has a background in law working for crypto exchanges and promoting innovation..." ( Click here to read the full text )

Intercontinental Exchange, Inc. (NYSE:ICE) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 . According to our database, 86 hedge fund portfolios held Intercontinental Exchange, Inc. (NYSE:ICE) at the end of the first quarter, up from 83 in the previous quarter. In Q1 2026, Intercontinental Exchange, Inc.'s (NYSE:ICE) net revenues reached a record $3 billion, up 20% year-over-year. While we acknowledge the potential of Intercontinental Exchange, Inc. (NYSE:ICE) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock .

In another article , we covered Intercontinental Exchange, Inc. (NYSE:ICE) and shared Janus Henderson Global Sustainable Equity Fund's insights on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.

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