Derren Nathan, head of equity research, Hargreaves Lansdown: “The FTSE 100 is holding onto yesterday’s gains, which saw the index close above 10,800 for the first time. Natural resources stocks are getting a boost from strengthening commodity prices, and victims of the AI fear trade, such as RELX, Experian and the London Stock Exchange Group, have been staging a comeback. Meanwhile, HSBC’s flawless report card proved to be the final ingredient that lifted London’s leading basket of shares into new territory. With a fistful of high-profile UK-listed companies reporting today, corporate news is likely to be the key driver of today’s moves in the index.
Rolls-Royce continues to impress with upgraded mid-term targets and a step-up in commitments to share buybacks. [MB1] WPP’s 2025 results were less encouraging, with competitive pressure weighing heavily on traditional advertising agencies. Like-for-like sales fell 3.6% to £13.6bn, and operating profit fell at a sharper 17.1% clip to £1.3bn. Further revenue declines are expected this year. Cindy Rose OBE will have to pull a rabbit out of the hat at today’s strategy update if investors are to buy into the group’s future-proofing credentials.
US stock futures are trading down slightly today. Beats by NVIDIA on Q4 financials and near-term guidance haven’t been enough to see the shares in the world’s most valuable company get another leg-up in after-market trading. Doubts are still being voiced over the sustainability of the company’s blistering growth. We think the numbers paint a different picture and remain very comfortable with NVIDIA’s inclusion as one of HL’s Five Shares to Watch for 2026. Hardware is the driving force of the AI revolution, and NVIDIA has a controlling position.
It’s a murkier picture for software companies. Salesforce’s Q4 numbers were stronger than expected, but investors in the sector are nervous, and the shares shed 4.6% after the close, on slightly more conservative guidance than analysts had been hoping for. With the forward earnings multiple at an all-time low, this could mark an attractive entry point if investors can be convinced that Salesforce is an AI winner. A bulging order book and booming sales of Agentforce are positive enough signs for management to authorise up to $50bn of share buybacks, over 25% of the company’s value. [AC2]
Brent Crude is back over $71 per barrel as both military and economic measures against Iran remain firmly on the table. Today’s bilateral talks in Geneva will be closely watched as Washington pushes for a deal on nuclear development. But upwards momentum has been stifled by a colossal 16mn addition to US oil inventories last week and rumours that Saudi Arabia is planning a further increase to production this year as its daily oil exports tipped a three-year high of 7.3mn barrels per day in the first 24 days of February.”
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