As the final quarter of 2025 approaches, stock markets have brushed aside the initial panic brought about by Trump’s aggressive stance on global trade and are sitting near all-time highs. Lower interest rates are providing a strong tailwind for sentiment towards share investing, but stubborn inflation and a tricky outlook mean that businesses need to stay nimble.
Overall, our five shares to watch have been delivering on their promises for 2025, and the strengths we think underpin their investment cases are still intact. Here’s a round-up of the key developments we’ve seen over the third quarter.
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.
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 continued to fly high over the first half. Building aircraft is its bread and butter, accounting for 70% of the group’s €29.6bn revenue in the period.
Complex supply chains keep outside competition at bay. But it’s also a double-edged sword. Some of Airbus’ suppliers have struggled to keep up with demand, and that could have a knock-on effect for production targets.
The group’s hoping to have around 820 commercial aircraft flying off the production line this year, but a slow start in the first half has dampened investor sentiment. While management remains confident that the pace will pick up, we see scope for Airbus falling slightly short of its full-year target.
That’s not a major issue. Improvements in the Defence & Space division are helping to pick up some of the slack, returning to profitability in the first half after a tough period of write-downs. With Europe looking to ramp up its defence spending in the coming years, we think Airbus looks well placed to capture some of the rising demand.
The balance sheet’s in great shape, with net cash standing at €7bn. Regular dividend payments are well covered, and we see scope for increased shareholder returns if cash levels improve further. But remember, shareholder returns can vary and are never guaranteed.
The valuation has risen above its long-run average, reflecting its strengthening market position and demand outlook. If Airbus can iron out supply chain issues, there could still be a long runway of growth ahead. But execution risk and the uncertainty surrounding tariffs are unlikely to disappear soon.
A member/members of the Share Research team and/or related parties holds Airbus shares.
Croda
Speciality chemical developer Croda saw a return to sales growth in the first half with volumes picking up in all divisions. Pricing was a little weak but increased business activity combined with cost savings initiatives helped improve profitability.
Although momentum slowed a little in the second quarter all units remained in growth territory, leaving full year guidance unchanged. Croda’s been working on both innovation and efficiency. Having differentiated products supports volumes which in turn drives utilisation across the group’s manufacturing footprint, a key metric when it comes to rebuilding margins.
The outlook for improved profitability has also been boosted by further cost-cuts identified this year. That’s seen the annualised savings target more than double to £100mn by the end of 2027.
Despite the operational progress being made, investor sentiment has been weak. A cut to vaccine development budgets in the United States is one risk to monitor for the group’s life sciences division. There are also some headwinds building for Croda’s Crop Protection customers. For Consumer Care, the key concern is the broader economic outlook.
However, we believe markets may have overplayed these risks and see two sources of upside potential.
Firstly, strong execution of the group’s strategy. There are no guarantees on this, but we’re encouraged by management’s delivery so far. There’s also some scope for improving market conditions for Croda’s customers. Recent falls in interest rates could help smooth out the cycle, but there are lots of other moving parts, so it’s a much harder call to make.
GSK
GSK’s having a strong year of both financial and clinical delivery. It upped earnings guidance after second quarter results and despite some research setbacks remains on track for five major product approvals in 2025.
But in common with the rest of the sector external events have been playing on investor’s minds. Pharmaceuticals in the UK have so far been exempted from American Tariffs. But there’s still some uncertainty over future import duties. GSK’s $30bn investment pledge to its US operations over the next five years should go some way to mitigating that risk.
Another risk to keep an eye on is US action on drug pricing, including the executive order to bring stateside prescription charges in line with other countries. It’s still too early to tell just how this will be implemented.
Investor sentiment towards GSK is looking somewhat healthier than it was after Donald Trump’s liberation day and we think the valuation broadly reflects the progress made this year.
GSK’s pipeline has given it the confidence to target sales of over $40bn by the end of 2031. Analysts are yet to be convinced that this is achievable, but if the gap between market expectations and that target can close then there could be some upside.
Much of that will be down to the pace of new product approvals, but despite recent success there can be no guarantees. While this dynamic plays out there’s a 4.6% dividend yield on offer. We think that looks well supported but again there’s always a risk it won’t materialise.
A member/members of the Share Research team and/or related parties holds GSK shares.
London Stock Exchange Group
There’s no way to sugarcoat it – sentiment toward the London Stock Exchange Group (LSEG) has been weak this year. It’s not alone, as the entire data and analytics sector has come under pressure as fears grow that artificial intelligence (AI) could be a disruptive force rather than a tailwind.
New AI-first entrants in financial data are a valid threat, but we think those concerns are overdone. Large incumbents like LSEG hold several advantages – proprietary data, embedded products, strong brands, and better user experiences.
LSEG needs to accelerate innovation as it rolls out its own AI enhancements. Still, we believe the ball remains firmly in its court. The Microsoft partnership offers an attractive distribution platform, and while new features haven’t come as fast as some would have liked to see, it should start to deliver product improvements soon.
Recent results were strong, with high single-digit revenue growth and improving margins. Recurring revenue (ASV) growth has been a pain point, as rivals push bundles and lower prices to win share. Management remains confident this isn’t sustainable, but another quarter or two of slower ASV growth seems likely before reacceleration.
Fundamentally, LSEG looks strong. Earnings are high quality, backed by healthy cash flow, and recent improvements make the profit outlook appealing. There’s also a strong balance sheet that’s being flexed on a new buyback, but we also think there’s scope for more reinvestment to drive revenue growth.
Overall, we see attractive upside from earnings growth and a potential sentiment rebound, though the latter is harder to predict and there are no guarantees.
NVIDIA
NVIDIA’s momentum in recent months has been strong. The latest quarter kept the growth engine humming, led by data‑centre demand, and management guided to roughly $54bn of revenue for the current period. Crucially, the better than expected outlook explicitly excludes any sales to China, underlining still‑strong AI infrastructure orders.
The China story is still complex.
Beijing has effectively frozen purchases of NVIDIA’s China‑compliant H20 and RTX Pro 6000D chips, and regulators have opened an antitrust probe. Near‑term visibility is blurry, so we no longer assume a quick recovery there, but remain optimistic longer term.
Outside China, NVIDIA has stayed busy. It’s taking a $5bn stake in Intel as part of a partnership to co‑develop PC and data‑centre products. There are some longer-term strategic benefits, and a reminder of NVIDIA’s ecosystem pull, but we don’t see it as especially material to near‑term earnings.
Another bright spot is sovereign AI. In the UK, NVIDIA and partners outlined one of Europe’s largest AI build‑outs, planning a multi‑billion‑pound investment to bolster national AI capacity. That’s a useful counterbalance to any China softness and shows demand broadening beyond the big US tech giants.
The core story hasn’t changed. NVIDIA’s full‑stack approach with chips, networking and CUDA software continues to set the pace. When we look at the mix of a reasonable valuation and strong expected earnings growth, it remains one of our favourite ways to gain exposure to the AI transition.
There are no guarantees, and the key risk in the coming months is whether Nvidia becomes a pawn in the US/China trade war.
A member/members 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.
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.
