As we close out the final quarterly update for our Five Shares to Watch 2025, it’s time to reflect on how these companies have navigated the year. From market tailwinds to sector-specific challenges, each pick has faced its own set of opportunities and risks.
We’re looking at recent performance, key developments, and what might lie ahead as we move into the new year.
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. Ratios also shouldn’t be looked at on their own. Past performance is not a reliable guide to future returns. Yields are not a reliable guide to future income.
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 had a good year in 2025. As one of the dominant players in building commercial aircraft, the group continued to benefit from strong demand and a decade-long order backlog.
However, at the start of December, the group discovered an issue with parts from one of its suppliers, causing full-year aircraft delivery guidance to be lowered by 30 to around 790. Hitting this target for 2025 remains a tall order, and we see scope for the group falling just short.
On the positive side, operational performance within the group remains strong, and a sharp rebound in profitability in its Defence division is helping to offset the financial impact. As a result, full-year underlying operating profit and free cash flow guidance remain on track, pointing to €7.0bn and €4.5bn, respectively.
The balance sheet also remains in good shape, with net cash standing at €7.0bn at the last count. That means the forward dividend yield of 1.7% looks well covered. But as always, shareholder returns are never guaranteed.
The valuation on a price-to-earnings basis is sitting a touch above the long-run average. Despite this, we still see more upside given its strong market position and demand outlook. If Airbus can iron out supply chain issues, there could be a long runway of growth ahead. But execution risks will be something to watch.
Croda
Croda’s third-quarter sales momentum has helped restore confidence after a challenging start to the year. Management remains cautious, keeping full-year guidance unchanged as customers continue to delay orders, but recent trends suggest potential upside if momentum holds.
Performance has been supported by strong demand for innovative niche products, now accounting for 35% of sales, and improving conditions across key end markets. Life sciences remain a strategic growth driver, though regulatory headwinds in the US have weighed on pharma-related revenues. Consumer care has seen pockets of weakness, but sustainability-led demand offers longer-term support.
Cash generation dipped earlier in the year due to one-off factors, but actions to improve cash management should help underpin the 4.2% dividend yield – though there are no guarantees. The balance sheet remains solid, and forecasts for 2025–26 look achievable in our view.
If management can deliver on guidance and rebuild investor confidence, there’s scope for valuation upside. Croda’s diversified footprint and localised manufacturing provide some insulation, but the key risk is ongoing economic and political uncertainties.
GSK
GSK delivered well last year, with recent upgrades to sales and profit guidance reinforcing confidence in the strategy. Shares have responded positively, but sentiment toward the wider pharma sector remains clouded by US policy uncertainty.
We think GSK’s substantial investment in American manufacturing should help shield it from tariff risks, though drug pricing reform remains a watchpoint.
The growth story looks intact. Management is targeting 15 major pipeline launches by 2031, spanning HIV, respiratory disease, and oncology – areas where recent approvals and next-generation therapies are already driving momentum.
HIV treatments make up around 20% of revenues, and newer options are gaining traction. Meanwhile, respiratory and cancer portfolios offer meaningful upside, supported by a strong clinical pipeline.
Cash generation is improving, underpinning a prospective dividend yield of 3.8%. The balance sheet looks healthy, and the valuation is less demanding than peers, offering potential upside if GSK executes well on its long-term ambitions.
Key risks centre around policy uncertainty in the US, along with the inherent risks associated with drug development that can be hard to predict.
London Stock Exchange Group
London Stock Exchange Group (LSEG) delivered well last year, with third-quarter results confirming it’s on track for roughly 7% revenue growth. Despite solid execution, sentiment has been weak, and shares have struggled as investors debate whether LSEG will benefit or suffer from AI. We still believe it’s positioned to win.
Recent efforts to boost profitability are paying off. Margins are improving, helping revenue growth translate into stronger profits and cash generation. Management reiterated its focus here, guiding for £2.4bn in free cash flow next year – a number we think could end up being conservative.
Looking ahead, LSEG’s growth story appears intact. The group is integrating new technology and expanding its offering, with cloud-based solutions and automation helping clients cut costs. Its partnership with Microsoft is gaining traction, embedding LSEG’s analytics into tools like Excel and Teams, which should enhance appeal.
LSEG is a high-quality business that looks set to benefit from the digitisation of trading, rising tech adoption, and strong demand for data analytics. Sentiment appears to have levelled out, and we think there’s upside on offer from here. Risks remain, particularly from intensifying competition and the potential for AI to disrupt legacy players.
NVIDIA
Nvidia has had a stellar year, and its latest results underline why it’s at the heart of the AI revolution. Third-quarter revenue surged 62%, and we expect growth of around 70% in the final quarter – numbers that speak to relentless demand for AI technology.
CEO Jensen Huang hasn’t stood still. Recent moves include a $5bn investment in Intel, a role in shaping the UK’s AI roadmap, a landmark partnership with OpenAI, and a $20bn licensing deal with AI-chip startup Groq. While rivals are experimenting with custom chips, Nvidia’s ability to deliver at scale, backed by cutting-edge architecture and energy efficiency, keeps it ahead of the pack.
Its comprehensive offering (chips, software, and networking) makes Nvidia the go-to choice for AI workloads. With a massive backlog of orders on the books, we think expectations around revenue in 2026 are still too low.
Despite some justified pressure on AI stocks, we believe Nvidia has been unfairly grouped with more speculative names that creates an opportunity. Nvidia remains best-in-class, trades at an attractive valuation, and is our preferred AI name heading into 2026. It’s why the stock features again on our Five Shares to Watch for 2026.
Key risks include shifts in sentiment toward AI, which we’ve seen in recent months, and increased competition.
The authors hold shares in Nvidia.
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.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.
