2 undervalued FTSE 100 shares I’d consider buying now

FTSE 100 Shares have made a promising start for 2023. The British blue-chip benchmark has climbed 5% this year to date, breaking through the 8,000 point barrier for the first time in its history.

Although the index has reached a new high, I still have a lot of cheap shares to buy.

With that in mind, let’s take a look at the two Footsie stocks on my watchlist.

London Stock Exchange Group

At London Stock Exchange Group (LSE:LSEG) share price is up 18% on the year. Despite impressive returns, I believe there is still plenty of growth potential for this FTSE 100 stock.

As the name suggests, this company owns and operates the London Stock Exchange. The group also owns financial market data provider Refinitiv as well as LCH (London Clearing House), which operates across multiple jurisdictions, asset classes, and currencies.

One recent positive development is MicrosoftAcquisition of 21.2 million London Stock Exchange shares, worth £1.6 billion. This is on top of a new 10-year strategic partnership announced late last year. The duo will combine Microsoft’s cloud infrastructure and London Stock Exchange’s analytics capabilities to develop new solutions for financial institutions.

The US tech giant has recently entered the artificial intelligence space with a major investment in Open AI – the developer of ChatGPT. As the UK financial sector embraces machine learning, the London Stock Exchange hopes to capitalize on this trend with its new transatlantic bond.

If you think about some of the possibilities in things like ChatGPT and AI, then imagine a world where you can speed up your timeline.

Emma Miller, head of investment banking and capital markets at the London Stock Exchange

A lack of fresh IPOs continues to act as a drag on the London Stock Exchange share price growth. If new listing activity remains low in 2023, this could prevent the group from realizing its potential. However, this is a risk I am prepared to take. With some cash, I would invest in the company today.

Scottish Mortgage Investment Trust

At Scottish Mortgage Investment Trust (LSE:SMT) share price has fallen 26% in the past year. I think now might be a good time for me to load up on more shares in Baillie Gifford’s flagship growth stock fund.

One of the attractive features of Scottish Mortgage shares is the international exposure they offer.

Although many FTSE 100 stocks derive their profits from overseas, these investment trusts are particularly globally diversified due to their stock market positioning. These include familiar names such as Tesla and Modern in addition to lesser-known stocks.

Beyond geographic diversification, Scottish Mortgage also provides exposure to private equity investments, which represent 28.1% of the portfolio.

For example, shares in Elon Musk’s company, Space Exploration Technologies (commonly known as SpaceX), are not available for purchase on the public market, but they are the seventh largest fund holder.

Around the world, many stocks have risen in the past year. This is the result of Scottish Mortgage’s share price. If central banks continue to raise interest rates, there is a risk that there may be more pain ahead.

However, with shares trading around £7 today, I think Scottish Mortgage’s risk/reward profile looks very good. I will be looking to buy more.