Some of the best growth stocks in the FTSE 100 have gone crazy. Time to take them?

If someone had asked me to compile a list of the best FTSE 100 stock growth in the past week, would probably have included a data scientist RELX (LSE: REL). That’s a stock I’ve wanted to buy for years. Is this my time?

My list may also include a software provider The Sage Groupand credit reference agencies Experian and an academic publisher Pearson. They all worked so well for so long, I thought I was going to miss the boat.

I felt the same way London Stock Exchange Group. Its price had fallen 25% for the year, so I went in and bought its shares three separate times last fall. I thought I was getting in at a bargain price. Now all five are gone, including my LSEG pole.

Blue-chips, red blood

It’s that bad AI again. Investors suddenly fear big language brands like Anthropic’s Claude could destroy their business models.

This concern is not new. It started hitting when ChatGPT arrived. Why would companies pay for data-driven services when AI can do the same job for so little money? RELX was quick to calm the nerves, saying it could turn AI to its advantage by embedding the technology into its offering. Markets are free. Until now.

RELX hits hard. It is down 27% in the last month and 44% in 12 months. Experian is down 24% in the past month, Sage is down 18%, and LSEG and Pearson are down 15%. Over the course of the year, they all dropped by about a third. Industrial bloodshed.

In The Motley Foolwe like to take advantage when quality companies fall through no fault of their own. But falling stocks are not automatic buys. They may fall a lot.

Markets are sad. Yesterday these stocks rallied, today they are sliding again. RELX, at the center of the storm, is down 5%. I’ve been waiting for this moment but I’m wary.

It’s a volatile time to buy stocks

I have bought some good FTSE 100 companies on bad news, mostly Diageo again JD Sports Fashion. Almost three years, and I’m down about 20% in both. I’ve learned that the first piece of bad news, a profit warning in these situations, can open the floodgates to more misery. It’s the same story with LSEG. And I think that’s dangerous for the software and data industry today.

Let’s be clear. I still like to buy distressed stocks, but I’m waiting for the dust to settle. Converting them can take time.

Fund manager Nick Train, who is doing well in this sector is his Finsbury Growth & Income Trusthe hit the ground running and said “indiscriminately, no doubt even nervously”we note AI programs like Claude still rely on data from these businesses. RELX, LSEG, and Sage even introduced share buybacks to take advantage of the volatility.

I think you are most likely right, but here is the problem. Uncertainty will last a long time. Investors will continue to fear AI disruption, panicking every time a new application is introduced. In the long run, I think these companies should do well. AI makes constant noise and I don’t think business customers can count on it to replace what RELX and others offer, but that doesn’t mean the skepticism will go away.

That RELX P/E fell from around 35 to less than 19. But I would still think carefully before considering stocks in the current frenzy.