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News Corp (NASDAQ:NWSA) Stock Falls as Company Sues AI Startup Perplexity 
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News Corp (NASDAQ:NWSA) Stock Falls as Company Sues AI Startup Perplexity 

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According to reports, Dow Jones and the New York Post have filed a lawsuit against the AI search engine, alleging copyright infringement.

News Corp (NWSA) stock is falling today after announcing that two assets of the media holding company are suing AI startup Perplexity. According to reports, Dow Jones and the New York Post have filed a lawsuit against the AI search engine, alleging copyright infringement.

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These News Corp properties are not the first outlets to accuse Perplexity of illicit activity. The New York Times (NYT) recently send the AI startup a cease and desist notice as well. The accusations against Perplexity center around unauthorized use of copyrighted news content for training AI language models.

Will the Perplexity Lawsuit Impact NWSA Stock?

Both News Corp stocks are struggling today as news of the Perplexity lawsuit continues to trend. As of this writing, both NWSA and NWS are down roughly 1%. Both units have struggled recently, even as the 2024 U.S. presidential election draws closer, compelling Americans to closely follow news updates. NWSA has fallen 7% over the past three months.

That said, it is unlikely that this development will have an impact on NWSA stock in the long term. The Wall Street Journal, a member of the Dow Jones media empire, reports that News Corp floated the possibility of discussing a content licensing deal with Perplexity in July 2024, to which the AI startup issued no response.

In a complaint filed yesterday with the Southern District of New York, News Corp stated, “This suit is brought by news publishers who seek redress for Perplexity’s brazen scheme to compete for readers while simultaneously freeriding on the valuable content the publishers produce.”

Is News Corp Stock a Buy, Sell or Hold?

While few Wall Street banks have issued ratings for News Corp stock, those that do maintain positive outlooks. Analysts have a Strong Buy consensus rating on NWSA stock based on 3 Buys, with no Holds or Sells assigned in the past three months, as indicated by the graphic below. After a 23% rally over the past year, the average NWSA price target of $37 per share implies 42% upside potential.

See more NWSA analyst ratings

Perplexity has the backing of former Amazon (AMZN) CEO Jeff Bezos. This lawsuit comes as the startup is looking to more than double its valuation through a new funding round. As of this writing, it has issued no direct statement on the News Corp lawsuit.

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