- Markets seemed concerned that rather than increase profitability, AI growth will force the commoditisation of services, squeezing margins
- The NASDAQ fell 1.43% as a result on Tuesday, and the S&P 500 was down 0.84%
- RELX has had a tough week, down 14% yesterday and opening down this morning – one of the worst performing stocks of the week so far
- US President Donald Trump’s plans to invest $12bn accruing critical minerals helped niche mining stocks
- Glaxo hits upgraded guidance with steady results
Emma Wall, Chief Investment Strategist, Hargreaves Lansdown
“It’s a mixed start for the FTSE 100 – a hangover from tech stock worries causing market wobbles yesterday. Markets seemed concerned that rather than increase profitability, AI growth will force the commoditisation of services, squeezing margins. The NASDAQ fell 1.43% as a result on Tuesday, and the S&P 500 was down 0.84%. This negativity has continued into today’s trading for tech sectors across Asia and Europe.
At home, RELX has had a tough week, down 14% yesterday and opening down this morning – one of the worst performing stocks of the week so far alongside the London Stock Exchange, Sage and Experian. All four tech businesses are looking to leverage AI for growth. This could explain some of the negativity – on the other side of the Pond, Nvidia and Microsoft had a poor day yesterday – but investors will be eagle eyed on RELX’s results in a couple of weeks to see if the slide is warranted. Markets are pricing in a substantial downgrade at Relx with the lowest multiple on offer in some six years. Our equity team’s analysis shows that this seems illogical, and with Relx’s consistent record of delivery, investment in this tech company looks to be a relatively low-risk opportunity at these levels.
Yesterday’s news that US President Donald Trump plans to invest $12bn accruing critical minerals helped niche mining stocks – with many up double digits in trading. The President is keen to break the US dependence on China for critical minerals, a key factor in recent trade negotiations. China dominates critical minerals supply chains, not just across Asia, but Africa and South America too – buying up mines, trading routes and manufacturing over many years. It is estimated that China has more than 90% of the refining capabilities for critical minerals – placing it in a position of power for any nation or company looking to produce chips, electric vehicles, aid the energy transition, build high tech military equipment – the list goes on.“
Glaxo hits upgraded guidance with steady results
Derren Nathan, head of equity analysis, Hargreaves Lansdown:
“GSK is earning a solid reputation as a slow and steady race winner, and it could get a little quicker yet. Full year revenue grew by 7% to £32.7bn when ignoring currency, the top-end of previously upgraded guidance. Core operating profit growth also touched the upper limit of the 9-11% range set after Q3 results as sales shifted in favour of higher margin speciality medicines and efficiency measures. For 2026, sales growth guidance is similar at 3-5% with core operating profit at 7-9%. If Luke Miels took any notes from Dame Emma Walmsley then the final outcome may prove to be a little better.
Looking further ahead, the 2031 sales outlook of £40bn looks to be well supported by a focussed clinical program with 2026 promising to be yet another catalyst rich year. GSK proved a solid selection as one of HL’s 5 share to watch in 2025, and the stock’s up 40.6% from where it was this time last year. But until market forecasts buy into GSK’s longer-term projections the scope for further upside looks limited.”
Parties related to the author hold stock in GSK.
