News Corp's AI-Ready Transformation and EBITDA Growth: A Strategic Buy Opportunity in Media 2.0

In the evolving landscape of Media 2.0, where artificial intelligence is no longer a buzzword but a business imperative, News Corp (NWS) has emerged as a standout case study. The company's strategic pivot toward AI-driven operations and monetization has not only insulated it from macroeconomic headwinds but also unlocked a new layer of value creation. With a 14% year-over-year EBITDA surge to $1.42 billion in 2025 and a robust balance sheet, News Corp is positioning itself as a compelling long-term investment. Let's dissect how its AI partnerships, operational efficiency gains, and disciplined capital allocation are reshaping the media giant's trajectory.

AI as a Dual-Edged Sword: Efficiency and Monetization

News Corp's AI strategy is a masterclass in leveraging technology for both cost optimization and revenue diversification. In its Dow Jones segment, generative AI tools in Factiva have transformed the delivery of professional insights, enabling real-time data synthesis for clients. This shift has driven 82% of the segment's revenue to digital sources in 2025, with the professional information business growing 10% year-over-year. The result? A 48% revenue increase for Dow Jones and a 10% EBITDA boost, even as traditional media peers struggle.

The Digital Real Estate Services division has similarly harnessed AI to refine its offerings. Platforms like realtor.com and realestate.com.au now use advanced analytics to optimize property listings, buyer matching, and lead generation. This has translated to a 17% revenue growth in 2025, with segment EBITDA rising 13% to $152 million. Notably, realestate.com.au's 132 million monthly visits in Q4 2025—four times that of its nearest competitor—highlight the competitive moat AI has fortified.

Even the Book Publishing segment, often seen as a low-margin play, has found new life through AI. Partnerships with Spotify for AI-driven audiobook personalization have spurred a 13% increase in audiobook sales, offsetting softness in the broader market. These examples underscore News Corp's ability to turn AI from a cost center into a revenue accelerator.

EBITDA Outperformance: A Byproduct of Strategic Discipline

News Corp's EBITDA growth isn't just a function of AI—it's a reflection of disciplined capital allocation and high-margin B2B dominance. The company's 94% of profits in 2025 came from B2B segments, which benefit from recurring revenue models and high customer retention (over 90% in professional information services). For context, the Risk & Compliance and Energy services under Dow Jones grew by 21% and 12%, respectively, in Q4 2025, driven by AI-enhanced analytics.

The financials tell a compelling story: a 14% EBITDA increase to $1.42 billion, a current ratio of 1.68, and $2.095 billion in cash reserves. These metrics underpin the company's July 2025 announcement of a $1 billion stock buyback program, which is projected to boost earnings per share by 8–10%. For investors, this signals a management team that understands how to balance reinvestment in AI with shareholder returns.

Portfolio Optimization: From Gatekeeper to Ecosystem Player

News Corp's AI strategy extends beyond internal tools. By asserting its intellectual property (IP) rights, the company has positioned itself as a gatekeeper of high-quality training data for AI models. CEO Robert Thomson's assertion that “AI IP powers AI” isn't just rhetoric—it's a monetizable reality. Licensing agreements with AI firms and legal actions to protect content have created a new revenue stream, reinforcing the value of News Corp's assets in the AI content ecosystem.

Strategic acquisitions, such as Dragonfly Intelligence and Oxford Analytica, have further solidified its leadership in professional information services. These moves align with the $1.2 trillion global digital content market's expansion, positioning News Corp to capture incremental value as AI adoption accelerates.

Investment Thesis: A Buy for the Long Game

For investors seeking exposure to the AI-driven media transformation, News Corp offers a rare combination of operational agility, financial strength, and strategic foresight. Its EBITDA growth is underpinned by high-margin B2B services, while its AI partnerships and IP monetization create a durable competitive edge. The stock's valuation, trading at a discount to its historical EBITDA multiple, suggests untapped potential.

Risks to Consider: Regulatory challenges around AI and IP remain unresolved, and macroeconomic volatility could dampen real estate and publishing demand. However, News Corp's diversified portfolio and cash reserves provide a buffer.

Bottom Line: News Corp's AI-ready transformation isn't just about surviving in Media 2.0—it's about leading it. For long-term investors, the company's disciplined capital returns, EBITDA outperformance, and AI-driven innovation make it a strategic buy. The question isn't whether News Corp can adapt to the AI era—it's whether investors can afford to ignore its momentum.