News Corp's AI Scare Gives Way to a Record Quarter

Weakness tied to its REA Group stake and broader AI disruption fears proved overdone, as Dow Jones and digital real estate drove a record quarterly beat.

7 Oct 2026 · 3 min read

News Corp fell alongside its majority-owned REA Group through late 2025 and into an AI-disruption panic that fund managers largely viewed as overblown, before a strong February result and a genuinely record July quarter, powered by Dow Jones and digital real estate beating expectations, drove a sharp recovery.

Weakness tied to REA Group, not News Corp itself

Blackwattle Investment Partners said weakness was driven by a slightly weak update from REA Group, in which News Corp owns a 61 percent stake, with REA reporting first-quarter FY26 listings down 8 percent year on year, cycling a strong comparative period, and management guiding to a broadly flat outcome for the full year, even as robust house prices supported the longer-term outlook. Perpetual Asset Management said News Corp detracted from performance, down 10.9 percent, as investor sentiment was weighed down by the REA stake, which fell nearly 8 percent, with mixed market appetite ahead of first-quarter FY2026 earnings prompting cautious profit-taking. Perpetual separately said News Corp was the largest detractor, down 11 percent, with no company-specific news, selling off in line with REA Group's performance after comments from Costar, the new owner of competitor Domain, pointed to improved performance from Domain in the market.

News Corporation was the largest detractor to performance during October, with the stock down 11%. Whilst there was no company specific news out during the period, the stock sold off in line with the performance of REA Group, in which it holds a 61% shareholding.

— Perpetual Asset Management, Monthly Report, October 2025

AI disruption fears deemed overblown amid strong results

Blackwattle Investment Partners said News Corp was a detractor despite delivering operationally strong results with beats across all line items, particularly Dow Jones and Book Publishing, with Dow Jones delivering its highest quarterly revenue growth in around three years, benefiting from increased business-to-business product revenue, the integration of Dragonfly and Oxford Analytics, and digital ad revenue growth. Perpetual Asset Management said the sell-off in News Corp reflected concerns about AI disruption, part of a well-documented de-rating across companies perceived at risk, but it believes concerns on News Corp are overblown and added to its position, given the strong February results and lead indicators supporting continued momentum.

Sell off in key holding News Corporation (NWS) due to concerns of AI disruption. We believe concerns on NWS are overblown and have added to the position. Whilst overlooked in the short term, the results delivered during February were strong.

— Perpetual Asset Management, Monthly Report, February 2026

A diversified, increasingly global business

Longwave Capital said News Corp generates around 75 percent of revenue outside Australia after consolidating its controlling interest in REA Group, with the offshore skew rising to roughly 85 percent excluding REA on a geographic look-through basis, dominated by Dow Jones, HarperCollins, News UK, Realtor.com and other international assets, with revenue increasingly tied to global digital subscriptions and professional information services.

Excluding REA on a geographic look-through basis, the offshore skew increases to roughly 85%, dominated by Dow Jones, HarperCollins, News UK, Realtor.com, and other international assets.

— Longwave Capital, Newsletter, June 2026

A record quarter confirms the thesis

Perpetual Asset Management said News Corp climbed 9.92 percent in July, with no major news during the month, before reporting a strong fourth-quarter result in early August, with a 13 percent EBITDA beat versus consensus on a group basis, all segments coming in above expectations, and the most significant beats in Dow Jones and Digital Real Estate, particularly encouraging given they are the company's key growth engines.

What fund managers say they are watching next is continued Dow Jones business-to-business and digital ad revenue momentum, REA Group's listings recovery as it cycles past tough comparative periods, delivery of continued digital real estate growth, and whether the AI-disruption discount continues unwinding given the strong results Perpetual highlights.