We encountered bullish papers (ICEs) on Intercontinental Exchange (Inc.) (ICEs) and replaced by a mastery of business models. In this article, we will summarize the Bulls’ paper on ice. As of May 7, the ICE shares (ICE) trading price was $176.53Th. According to Yahoo Finance, Ice's P/E is 36.55 and 26.53, respectively.
A bustling stock exchange floor surrounded by a bunch of monitors.
InterContinental Exchange (ICE) is not only a trading platform, but also an intangible building that is the foundation of some of the most critical financial, energy and mortgage transactions in the world. Whether it is pricing Brent crude oil, execution of sovereign bond transactions, or underwriting of U.S. mortgages, ICE may be charging fees and promoting infrastructure behind the scenes. Its scope covers 13 regulated communications and 6 entire global financial hubs, connecting every major financial player from lenders and governments to energy merchants and mortgage processors. This is not a market, but an economic operating system. The dominance of ICE is institutional, geographical and regulatory. In three major verticals (exchange, fixed income and data, and collateral technology), the company has embed itself into the workflow and compliance systems of global finance. The New York Stock Exchange, owned by ICE, lists 70% of the S&P 500, while its futures sell benchmark global commodities from oil to coffee. Meanwhile, its bond pricing engine covers nearly 3 million fixed income tools, powering ETFs, credit models and risk frameworks, and covers risk frameworks in 150 countries and 80 currencies. This is not only data, but also a legal and operational essential infrastructure.
The company's mortgage technology platform touches more than 70% of all mortgages in the U.S., and its digital tools automate everything from loan application to foreclosure processing. The power of this business is not an isolated segment, but the self-enhanced nature of its ecosystem. The collateral data originates from bond pricing, which informs ETF construction, which in turn drives trading activity, creating a flywheel effect that deepens user dependence and increases switching costs. ICE has turned the necessary processes into frequent revenue, with subscription and data products now accounting for more than 50% of total revenue, up from 34% in 2014. The gross profit margin of these products exceeds 60%, which is the structural advantage of a 40% profit margin of the transaction business. Ice-dependent cultivation is structural and almost impossible to relax. Its house cleaning is stipulated by law. Its pricing data is hardcoded into regulatory documents, ETF prospectuses and compliance software. Its software provides power to the daily operations of institutions that cannot afford millisecond damage.
Regulation often kills innovation elsewhere and is the moat of ice. Due to post-2008 reforms, global derivatives must be cleared through central rivals, a role that dominates North America with nearly $7 trillion in annual CDS nominal volume cleared. Meanwhile, its NYSE franchise benefits from regulatory preferences and brands, attracting the largest IPO and ETF listing institutions. Not only are these licenses valuable, but they are irreplaceable, often associated with decades of relationships and require specific jurisdictional compliance frameworks that competitors cannot replicate. The intensity of ice is further consolidated through its network effects. Banks that use ICE's mortgage on the original platform will naturally be included in their service platform, especially after the acquisition of Black Knight. The agreement locks on the front and back end of the U.S. mortgage chain, giving the ice an unrivalled end-to-end control of the $13 trillion market. Once integrated, banks face huge costs and conversion risks, and this dynamic turns software usage into an annuity-style source of income.
Even in the downturn, the business buzz of ICE is the same. When equity volumes fall, mortgage services or CDS volumes usually rise. If IPO activity cools down, bond pricing and subscription revenues continue to flow. Its diverse exposure (thousand miles, bonds, mortgages and stocks) provides natural hedges to prevent volatility. The company's control over time and speed is another invisible advantage. With its proprietary low-latency data network and unified switching architecture (pillars), ICE provides excellent execution speed and reliability, which is crucial to high-frequency traders and risk tables.
Ultimately, the power of ICE lies in maintaining more cities: legal coercion, operational embedding, data hegemony and network advantages. Competitors may try to emulate part of their products, but the ICE portfolio has been built – across software, hardware, regulatory access, and deeply embedded customer workflows, forming a fortress-like business. This is not only another exchange operator; it is a key enabler of global financial infrastructure, quietly profiting from almost all meaningful transactions in the modern economy.
InterContinental Exchange (Inc.) (ICE) is not on our list The 30 Most Popular Stocks in Hedge Funds. According to our database, 91 hedge fund portfolio held ICE at the end of the fourth quarter, which was 84 of the previous quarter. Although we acknowledge the risks and potential of ICE as an investment, our belief is that certain AI stocks have greater expectations and provide higher returns over a shorter time frame. If you are looking for AI stocks that are more promising than ICE but have less than 5 times its earnings, check out our report Cheapest AI stocks.
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Disclosure: None. This article was originally published in Insider Monkey.