The FTSE 100 held its ground on Friday as its lack of tech and AI exposure proved to be a benefit.
Broadcom’s failure to keep pace with soaring AI-related expectations with this week’s earnings and outlook prompted a wave of selling among related companies and led to weakness across Asia and Wall Street. The correction was compounded by a continuing lack of progress towards a US-Iran peace deal – though oil prices remain below $95 per barrel on hopes a breakthrough can be found.
There will be scrutiny of the US jobs release later. After April’s strong data, investors will be watching to see if the headline figure falls within the 85,000 to 96,000 range analysts expect and whether unemployment stays at 4.3%.
Another upside surprise like April’s would strengthen the case for rates staying higher for longer, especially if wage growth remains robust. By contrast, a weaker-than-expected reading could raise recession concerns and alter expectations for interest rates.
Raspberry Pi
The momentum shown by British low-cost computer maker Raspberry Pi this year continues with its latest update delivering an upgrade which underlines its credentials as an AI beneficiary.
There was an explosion of interest in Raspberry Pi in February with surging demand for its credit card-sized computers among AI enthusiasts as a low-cost way to run OpenClaw.
Unlike most chatbots which operate largely in the cloud, OpenClaw can run locally on a personal computer instead. Raspberry Pi sees opportunities from broadening interest in using AI locally on its hardware – so-called ‘Edge AI’ – driven by perceived advantages around cost and privacy.
Raspberry Pi can give itself a pat on the back for building up an inventory of lower cost memory chips in 2025 due to their current scarcity and much higher cost amid surging AI-related demand.
While these buffers are likely to be depleted in the second half of this year leading to margin pressure, Raspberry Pi intends to lean on its debt facilities to make purchases to safeguard future supply – which feels like sensible management of its supply chain.
Evoke / William Hill
Predator turns to prey as William Hill’s owner Evoke is set to be gobbled up by Bally’s Intralot. The deal looks chunky with a massive premium to market price just before Evoke effectively put itself up for sale. However, Evoke had already rallied in April when Bally’s Intralot confirmed bid interest at 50p per share. The firm offer is pitched slightly higher at 52p per share.
It will bring an end to William Hill’s 24-year stint on the UK stock market as a standalone business and under Evoke’s corporate umbrella.
The UK’s last man standing as a listed entity among the big high street betting names is now Ladbrokes which is owned by Entain. Paddy Power’s owner Flutter has already switched allegiance to the US and looks set to ditch its London listing completely.
Gambling is still a viable industry in the UK, except it is increasingly done online. High street betting shops are a dying breed thanks to immense tax and cost pressures.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
