NWSA Plunges 0.75% to 2025 Low Amid Leadership Transition and AI Legal Battles

News Corporation (NWSA) shares slid to a 2025 low on Monday, with the stock posting an intraday drop of 1.01% before closing down 0.75%. The decline marked renewed investor caution amid ongoing corporate and legal developments at the media giant.

The leadership transition at News Corp remains a pivotal factor. Rupert Murdoch’s decision to step down as chairman of News Corp and Fox Corporation has introduced uncertainty, despite his son Lachlan assuming the role. While long-term investors may view the succession as a stable continuation of the Murdoch legacy, the market’s short-term reaction reflects concerns over strategic direction amid rapid digital transformation and AI-driven disruptions. Analysts note that Lachlan’s ability to navigate regulatory challenges and shifting consumer preferences will be critical to restoring investor confidence.

Legal actions against AI startups further complicate the outlook. News Corp’s subsidiaries, including Dow Jones and the New York Post, recently filed a lawsuit against Perplexity, alleging unauthorized use of their copyrighted content to train AI models. The litigation highlights the company’s aggressive stance on intellectual property rights in the AI era but also exposes potential risks. While the lawsuit could open avenues for licensing revenue, prolonged legal battles may strain resources and delay strategic initiatives. The case aligns with broader industry trends, positioning News Corp as a key player in shaping content licensing frameworks for AI development.

Analyst sentiment remains cautiously optimistic, with several institutions maintaining "Buy" or "Overweight" ratings for NWSA. Price targets have been raised in recent months, reflecting confidence in the company’s strong cash flow and undervaluation relative to peers. News Corp’s 0.65% dividend yield also appeals to income-focused investors, particularly in a low-interest-rate environment. However, analysts caution that the stock’s beta of 1.18 indicates heightened sensitivity to news events, such as the ongoing Perplexity litigation, which could amplify short-term volatility.

Looking ahead, the company’s success in monetizing its content through AI partnerships and its ability to adapt to regulatory shifts will be key drivers. While the immediate focus remains on legal and leadership challenges, News Corp’s long-term prospects hinge on its capacity to balance innovation with traditional media strengths in an evolving landscape.