Supreme Court Rulings Could Redefine LGBTQ+ Inclusion in Schools—and Impact Ed-Tech Stocks

The U.S. Supreme Court’s upcoming decisions in Mahmoud v. Taylor and A.J.T. v. Osseo Area Schools could reshape the educational landscape, with profound implications for LGBTQ+ inclusivity and disability accommodations. While the latter case focuses on disability rights, the former—scheduled for oral arguments on April 22, 2025—has become a flashpoint for debates over religious freedom and curriculum control. For investors, the rulings could redefine demand for LGBTQ+-inclusive educational materials, impacting companies like Amplify Education (AMFY), Scholastic (SCHL), and Pearson (PSO).

The Key Cases: A Clash of Rights

Mahmoud v. Taylor centers on whether Maryland parents can legally opt their children out of LGBTQ+-inclusive curricula, such as storybooks addressing gender identity or sexuality, on religious grounds. The plaintiffs argue that exposure to such materials infringes on their First Amendment right to raise their children according to their beliefs. Lower courts have rejected these claims, but a conservative-leaning Supreme Court could overturn this precedent.

If the Court rules in favor of the parents, states may mandate opt-out policies, forcing schools to revise curricula or risk legal challenges. This could reduce demand for LGBTQ+-themed materials, directly affecting publishers and ed-tech firms that incorporate such content. Conversely, a ruling upholding the lower courts’ decisions would preserve schools’ autonomy, maintaining demand for inclusive resources.

Implications for Ed-Tech and Publishing

The outcome of Mahmoud will likely divide the education sector:
1. Opt-Out Mandates: A pro-parent ruling could lead to fragmented demand. States sympathetic to religious objections might pass laws requiring opt-outs, while progressive states could double down on inclusivity. This could create regional disparities in textbook adoption and digital content purchases.
2. Litigation Risks: Schools might face lawsuits if they fail to comply with new opt-out requirements, diverting resources from curriculum development to legal defense.
3. Market Segmentation: Publishers may need to produce dual editions of materials—one inclusive, one stripped of LGBTQ+ themes—to cater to different markets. This could boost short-term sales but complicate long-term innovation.

Meanwhile, A.J.T. v. Osseo Area Schools, set for arguments on April 28, addresses whether schools must meet a high “bad faith” standard to avoid liability for inadequate disability accommodations. A ruling favoring the student could increase demand for assistive technologies and specialized resources, benefiting companies like Don Johnston (a provider of assistive software) and Cambium Learning (which focuses on special education).

Data-Driven Risks and Opportunities

Historically, education stocks have been sensitive to policy shifts. For instance, after the 2020 Bostock v. Clayton County ruling expanded LGBTQ+ workplace protections, companies like McGraw-Hill (MHFG) saw increased demand for diversity training materials. Conversely, the 2022 Students for Fair Admissions v. Harvard decision against race-conscious admissions caused a dip in stocks tied to affirmative action programs.

In the current term, investors should monitor:
- Amplify Education (AMFY): Its digital curricula often include social-emotional learning (SEL) modules addressing identity and inclusion. A ruling against LGBTQ+ materials could pressure AMFY to revise content or lose contracts in conservative states.
- Scholastic (SCHL): As a leading textbook publisher, SCHL could face pressure to produce “faith-friendly” editions, raising production costs and diluting margins.
- Pearson (PSO): With global operations, PSO might navigate U.S. regulatory shifts while capitalizing on stable international markets.

Conclusion: A Turning Point for Ed-Tech

The Supreme Court’s decisions could create a “two Americas” dynamic in education. A pro-opt-out ruling in Mahmoud might:
- Reduce demand for LGBTQ+-inclusive content, particularly in conservative states, hurting publishers like SCHL and AMFY.
- Boost litigation costs for schools, potentially diverting funds from ed-tech purchases.
- Encourage niche markets for faith-aligned educational materials, creating opportunities for smaller firms.

Conversely, a ruling upholding schools’ rights to teach inclusivity would likely stabilize demand, favoring companies that invest in diversity-focused content.

Investors should also note broader trends. Over 12 million U.S. students have disabilities, and a ruling in A.J.T. favoring accommodations could drive demand for assistive tech, benefiting niche players. Meanwhile, the Court’s focus on religious rights—seen in cases like Kennedy v. Bremerton School District—may embolden states to pass laws restricting LGBTQ+ content, further fragmenting the education market.

With oral arguments nearing and the term’s outcomes expected by June, investors should brace for volatility. Ed-tech stocks will be tested by both legal outcomes and the political winds shaping American classrooms.

In this high-stakes environment, companies that remain agile—whether pivoting to regional demands or doubling down on compliance with inclusivity standards—will be best positioned to weather the storm. The Supreme Court isn’t just deciding cases; it’s charting the future of education—and the investors who bet on it must be ready to follow.