CMC Markets (LSE: CMCX) has quietly become one of the FTSE 250‘s standout performers, up more than 240% over the past year. That’s no small feat, and for growth-focused UK investors, it warrants closer inspection.
But what exactly does the company do, and why has it suddenly captured investor imagination?
Piggybacking the AI trade
CMC Markets is a London-listed online trading and investing platform founded in 1989. It offers contracts for difference (CFDs), financial spread betting in the UK and Ireland, and stockbroking services across the UK, Australia, and Singapore.
The group serves retail, professional, and institutional clients in 12 countries, making money from:
- Spreads.
- Commissions.
- Overnight financing.
- Interest on client cash balances.
So how’s a trading platform riding the AI wave?
Global equity markets have exploded higher on the back of surging demand for AI, particularly data centre infrastructure. Chipmakers and memory suppliers such as Nvidia, SanDisk, Western Digital, and Micron have seen their valuations soar as investors pile into anything AI-related.
While CMC Markets isn’t building AI infrastructure, it’s quietly benefiting from the trading frenzy around these names. The company’s latest full-year results show net operating income up 15%, profit before tax up 20%, and a dividend of 13.8p.
| Metric | FY26 Result | Change |
|---|---|---|
| Net operating income | £392.6m | 15% |
| Profit before tax | £101.3m | 20% |
| Dividend per share | 13.8p | from 11.4p |
Management highlighted record stockbroking activity in Australia and growing institutional partnerships as key drivers.In other words, as clients chase AI stocks and volatility picks up, CMC collects more spreads and commissions. But can this momentum last if AI enthusiasm fades?
Beyond the trading screen
Beyond offering access to AI stocks, CMC is sharpening its AI angle through content. Its Opto research arm regularly publishes pieces on AI themes and individual names, keeping clients engaged with the hottest topics in tech.
The platform relies on several types of complex tech systems, including:
- Advanced data processing.
- Algorithmic risk management.
- Automated pricing systems.
While these aren’t inherently AI-driven, many of them increasingly benefit from AI enhancements.
But AI’s still largely speculative, and CMC already faces key risks. Its earnings are cyclical, and heavily exposed to market volatility and client activity levels. Plus, CFDs and spread betting face tight regulation, with leverage caps and potential future restrictions.
Talk of a possible ‘AI bubble’ has been circling for months. If there is one, and it busts, a sharp correction could scare off retail clients, wiping out a chunk of CMC’s user base.
This adds pressure to what is already a high valuation — the price is almost 30 times earnings per share (EPS). If the next results disappoint, or trading volumes dip, it could hurt the share price.
The bottom line
How far the AI trade runs is anybody’s guess, but many believe we’re still early innings. CMC Markets could keep benefiting as long as clients stay active in tech and growth names.
That said, the current valuation suggests much of the gains are already priced in, so a minor correction wouldn’t be surprising in the short term.
For long-term investors though, the diversified business model and improving profitability are elements of a stock worth weighing up carefully.
The real question for me is, how well can CMC sustain this momentum if (when) the AI hype cools? If that sounds too risky for you, we may have another growth stock more up your street…
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Mark Hartley does not hold any positions in the companies mentioned.
