2025 has continued to throw challenges in the way of financial markets – from further confusion around global trade policy to a now shaky outlook for economic growth.
Meanwhile, the outlook for inflation continues to cause headaches for central bankers who are taking a cautious approach to cutting interest rates.
The companies behind our five shares to watch have now all updated on their first quarters, and overall, the picture is one of resilience.
Here’s how they’ve been doing so far and what investors will need to keep an eye on going forward.
This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Investments and any income from them will rise and fall in value, so you could get back less than you invest. Past performance isn’t a guide to the future and ratios also shouldn’t be looked at on their own.
Investing in an individual company isn’t right for everyone because if that company fails, you could lose your whole investment. If you cannot afford this, investing in a single company might not be right for you. You should make sure you understand the companies you’re investing in and their specific risks. You should also make sure any shares you own are part of a diversified portfolio.
Airbus
Airbus took off strongly in the first quarter of 2025, beating market expectations and seeing broad-based growth across all segments.
Both the Helicopters and Defence & Space segments achieved double-digit growth, with the latter returning to profitability after a challenging period of write-downs in previous years. We’re cautiously optimistic that performance in these divisions will continue to improve.
Building commercial aircraft remains Airbus’s core focus, and deliveries got off to a slightly slower start this year, falling from 142 to 136 aircraft in the period.
Despite ongoing issues with some of its suppliers, management seems confident that the pace will pick up and has reiterated full-year delivery guidance of around 820 aircraft this year.
Full-year profit targets also remain on track, with the group expecting underlying operating profits of around €7bn.
This doesn’t factor in the potential impact of tariffs though, which are expected to reduce profits by a low single-digit percentage.
The tariff dynamics are ever-changing and have the potential to negatively impact production throughout the supply chain, so we can’t rule out full-year targets being lowered slightly later in the year.
While tariffs are negative for the industry, the commercial aircraft market is dominated by just two companies, with the split standing at roughly 60/40 in Airbus’ favour.
Given the makeup of its supply chains and production locations, we believe Airbus is better insulated than its competitors from both a cost and production standpoint.
Net cash at the end of the first quarter stood at €11bn, slightly below the year-end level but still strong enough to support future dividend payments, although there are of course no guarantees.
Looking ahead, Airbus’ long-term outlook still looks attractive, supported by its dominant market position, growing demand, and robust balance sheet.
However, ongoing supply chain fragility and trade policy challenges suggest there could be some turbulence before clearer skies emerge.
A member of the share research team and/or related parties holds Airbus shares.
Croda
Croda’s first quarter trading update showed some promising signs of a turnaround.
A return to sales growth was primarily driven by higher volumes, supported by an uplift across all regions and business segments. Thanks to this strong start to the year, the group has reiterated its full year underlying pre-tax profit guidance of £265-£295mn.
The Life Sciences division saw a notable rebound, particularly in Crop Protection. This area’s volumes remained under pressure in 2024 owing to prolonged destocking.
However with the agricultural sector continuing to face challenges, there are still some question marks about the sustainability of this recovery.
Tariffs remain a concern, but Croda’s relatively modest exposure to the US market, where 70% of sales are locally manufactured, provides some comfort that it can navigate this fast-moving landscape.
Management also plans to introduce a tariff surcharge to pass on tariff costs to customers, helping to protect margins.
However, if tariffs lead to a global economic slowdown, demand for discretionary items like cosmetics, for which Croda is a key supplier, would likely weaken.
Croda’s recovery efforts also include levers that can help boost margins, like improving factory utilisation and pursuing cost savings. Meanwhile, its geographic and product diversification reduces reliance on any single end market.
Croda’s transformation toward a higher-quality, differentiated products provider continues to gain momentum. The balance sheet is in a good place, with manageable debt leaving room for strategic reinvestment or acquisitions.
Efficiency improvements should offer an extra layer of protection too.
That said, the macroeconomic backdrop remains uncertain, and we could still see some bumps along the road.
GSK
GSK had a strong start to the year, beating market expectations despite weak vaccine sales, US action on drug pricing and tariff concerns.
GSK is aiming for five US regulatory approvals this year, and has guided for 14 product launches by 2031, each with the potential for over £2bn in annual peak sales. That’s a bold outlook, and while not guaranteed, we think there’s room for upside to the current £40bn 2031 revenue target.
The group’s HIV portfolio continues to impress, accounting for 20% of its revenue, with newer long-acting treatments gaining traction. A strong pipeline of next-generation HIV therapies could help GSK to strengthen its position in this lucrative market.
While the industry is yet to be caught up in increases in US tariffs, there’s no guarantee this won’t happen.
In preparation, the company is implementing dual sourcing for critical materials and reducing dependence on single suppliers or geographic regions.
Donald Trump’s executive order for pharmaceutical companies to match their prices on certain drugs to those offered in other regions is also yet to be fully implemented.
There are some significant hurdles to this mandate becoming reality, but if it does, GSK is likely to be impacted negatively.
The valuation is currently sitting below its long-term average and well below many sector peers. However, that could also reflect investor scepticism about GSK’s ability to consistently commercialise innovation.
If GSK can continue to execute delivery of its pipeline, there could be some upside on offer.
But bringing new medicines to market is fraught with challenges, so there can be no guarantees.
A member of the share research team and/or related parties holds GSK shares.
London Stock Exchange Group (LSEG)
LSEG has held up well in early 2025, with first-quarter underlying revenue up 7.8%, confirming a steady trajectory across all core divisions.
The Markets business was the standout performer, helped by elevated trading volumes off the back of global uncertainty and rising geopolitical tensions. Trading activity remained strong into April, and we’re cautiously optimistic that momentum will continue over the rest of the second quarter.
Management is confident in its full-year guidance, forecasting 6.5-7.5% underlying revenue growth. Importantly, the group reported no signs of material changes in customer behaviour, suggesting that LSEG’s diversified business model is holding up well in such dynamic market conditions.
Its business model benefits from a healthy balance between transactional and recurring revenues, including services like clearing and settlement. This combination provides the group with a variety of income streams, helping to provide a cushion during market downturns.
LSEG is also pushing ahead with cloud integration and automation, supporting clients through cost reduction and workflow efficiency.
Its Microsoft partnership is starting to gain traction, with LSEG’s data and analytics tools now embedded in platforms like Excel and Teams. That should help its products to become a key part of clients’ daily workflows, making it unappealing for them to switch away.
We still think the business is well placed to capitalise on long-term trends like the digitisation of capital markets and growing demand for real-time data.
But gaining market share against its US peers is a tough challenge, and it hinges on how well it can integrate its offerings to the end user.
The current valuation doesn’t leave too much room for missteps, which means LSEG needs to keep delivering.
NVIDIA
NVIDIA has continued its remarkable growth this year, with a strong first-quarter performance reinforcing its position as a cornerstone of the global AI infrastructure buildout.
Tighter US export restrictions led to a sizable inventory write-down on its Chinese chips, but it was smaller than expected.
Demand from core data centre clients remains robust, with momentum further driven by governments and large enterprises racing to scale up their AI capabilities.
Despite guidance that restrictions on sales to China might lead to the group missing out on around $8bn of revenue in the second quarter, total revenue is still expected to grow by around 50%.
As AI adoption accelerates, the emphasis is shifting from model training to real-world application, known as inference, which could represent an even greater opportunity.
Although notable competitors are emerging in the inference space, NVIDIA stands to benefit regardless.
By providing complementary technologies to these rivals, the company can also capitalise on their growth while reinforcing its own leadership in the AI ecosystem.
In response to the export curbs, NVIDIA is looking to develop lower-spec alternatives it could legally supply to China. But that could prove to be a challenge.
Meanwhile, China is accelerating the development of domestic alternatives.
Outside of China, we don't see this as an immediate threat to NVIDIA’s high-end chips, though it’s worth watching this space closely.
The competitive landscape is evolving rapidly, and supply chain concentration remains a vulnerability. While we don’t think NVIDIA’s valuation fully reflects the long-term growth opportunities, investor sentiment has bounced back following the initial shock from tighter export controls.
With no direct replacement for the lost revenue from China, it adds additional pressure for other regions to deliver.
A member of the share research team and/or related parties holds NVIDIA shares.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss. Yields are variable and not guaranteed.
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