Intercontinental Exchange, Inc. (ICE): A Bull Case Theory

We came across a bullish thesis on Intercontinental Exchange, Inc. (ICE) on Substack by Business Model Mastery. In this article, we will summarize the bulls’ thesis on ICE. Intercontinental Exchange, Inc. (ICE)'s share was trading at $176.53 as of May 7^th. ICE’s trailing and forward P/E were 36.55 and 26.53 respectively according to Yahoo Finance.

Intercontinental Exchange (ICE) is not simply a trading platform—it is the invisible architecture underpinning some of the world’s most critical financial, energy, and mortgage transactions. Whether it’s the pricing of a barrel of Brent crude, the execution of a sovereign bond trade, or the underwriting of a U.S. mortgage, ICE is likely collecting fees and facilitating the infrastructure behind the scenes. Its reach spans 13 regulated exchanges and six clearinghouses across global financial hubs, connecting every major financial actor from lenders and governments to energy traders and mortgage processors. This isn't a marketplace—it’s an economic operating system. ICE's dominance is institutional, geographic, and regulatory. Across three main verticals—exchanges, fixed income and data, and mortgage technology—the company has embedded itself into the workflows and compliance systems of global finance. The NYSE, which ICE owns, lists 70% of the S&P 500, while its futures markets benchmark global commodities from oil to coffee. Meanwhile, its bond pricing engine covers nearly 3 million fixed-income instruments, powering ETFs, credit models, and risk frameworks across 150 countries and 80 currencies. This is not simply data—it is legally and operationally essential infrastructure.

The company’s mortgage technology platform touches over 70% of all U.S. mortgage originations, with its digital tools automating everything from loan application to foreclosure processing. The power of this business lies not in siloed segments but in the self-reinforcing nature of its ecosystem. Mortgage data feeds into bond pricing, which informs ETF construction, which in turn drives trading activity—creating a flywheel effect that deepens user dependence and raises switching costs. ICE has turned necessary processes into recurring revenue, with subscriptions and data products now comprising over 50% of total revenue, up from 34% in 2014. These products carry gross margins exceeding 60%, a structural advantage over the 40% margins of transactional businesses. The dependence ICE cultivates is structural and nearly impossible to unwind. Its clearinghouses are mandated by law. Its pricing data is hardcoded into regulatory filings, ETF prospectuses, and compliance software. And its software powers daily operations at institutions that cannot afford a millisecond of disruption.

Regulation, which often stifles innovation elsewhere, serves as ICE’s moat. Since post-2008 reforms, global derivatives must clear through central counterparties—a role ICE dominates in North America with nearly $7 trillion in annual CDS notional volume cleared. Meanwhile, its NYSE franchise benefits from regulatory preference and branding that attract the largest institutions for IPOs and ETF listings. These licenses are not just valuable—they’re irreplicable, often tied to decades-old relationships and requiring jurisdiction-specific compliance frameworks that competitors cannot replicate. The strength of ICE is further solidified by its network effects. A bank using ICE’s mortgage origination platform is naturally pulled into its servicing platform, especially after the acquisition of Black Knight. That deal locked in both the front and back end of the U.S. mortgage chain, giving ICE unparalleled end-to-end control over a $13 trillion market. Once integrated, banks face enormous cost and risk to switch—a dynamic that turns software usage into an annuity-like revenue stream.

Even in downturns, ICE’s business hums. When equity volumes slump, mortgage servicing or CDS volumes often rise. If IPO activity cools, bond pricing and subscription revenues keep flowing. Its diversified exposure—across energy, bonds, mortgages, and equities—provides a natural hedge against volatility. The company’s control of time and speed is another unseen advantage. With its proprietary low-latency data network and unified exchange architecture (Pillar), ICE offers superior execution speed and reliability, critical to high-frequency traders and risk desks.

Ultimately, ICE’s strength lies in a multi-dimensional moat: legal compulsion, operational embedment, data hegemony, and network dominance. Competitors may attempt to mimic parts of its offering, but the combination ICE has built—spanning software, hardware, regulatory access, and deeply embedded customer workflows—forms a fortress-like business. This is not just another exchange operator; it is a critical enabler of global financial infrastructure, quietly profiting from nearly every meaningful transaction in the modern economy.

Intercontinental Exchange, Inc. (ICE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held ICE at the end of the fourth quarter which was 84 in the previous quarter. While we acknowledge the risk and potential of ICE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ICE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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