Daily market update: OpenAI-Nvidia tie-up, Kenvue, Kingfisher, Raspberry Pi

The FTSE 100 ticked higher on Tuesday as US shares were higher despite the hoo-ha around visa fees, says AJ Bell Investment Director Russ Mould.

Helping to draw focus from this issue was Nvidia’s $100 billion tie-up with OpenAI which helped US indices and some Asian markets to new record levels.

There was a split of opinion on whether this reflected the fact there is no alternative to Nvidia for the chips required to power AI or whether it was questionable that Nvidia was effectively funding a customer to buy its products.

Despite President Trump suggesting a link between Tylenol and autism the company behind the branded paracetamol – Kenvue – did not suffer too much pain in the end overnight, paring earlier losses. Though the shares are down meaningfully since the first murmurings from the administration on a possible link earlier this month.

Industrial outfit Smiths Group was among the top FTSE 100 risers as investors reacted positively to news the break-up of the company is proceeding at pace. Such a move has been at the top of many investors’ wish lists for some time, so it’s no surprise to see the company’s progress on this front lauded.

Elsewhere, retailers and housebuilders recaptured some of their recent losses, while mining outfit Antofagasta continued to move higher amid M&A speculation in the sector.

Kingfisher

In what feels like pretty gloomy economic circumstances the latest results from B&Q-owner Kingfisher measure up as an achievement to match an amateur taking on a good-sized DIY project.

Some of its strong showing can be attributed to a one-off factor in the warm summer weather which helped drive sales of garden furniture and barbeques so investors will be watching future updates closely for any signs of the outlook deteriorating.

In that context, the decision to accelerate the company’s share buyback programme and to guide for a full-year outcome at the top end of current guidance is a decent show of confidence.

While sales remain fairly sluggish, Kingfisher has kept a tight rein on costs and has captured a larger number of trade customers – which typically buy a higher volume of items and often higher value ones too. It is also doing a decent job of maintaining and building on its robust market position.

The company may never get back to the levels of demand seen during the pandemic. Back then households had the means and incentive to spend money on doing up indoor spaces in which they were spending most of their time and other parts of the retail sector couldn’t trade from physical outlets.

However, Kingfisher is showing signs of setting itself on a sustainable path and investors are reacting accordingly.

Raspberry Pi

It feels like quite a lot is riding on Raspberry Pi – which represented the most meaningful tech IPO in the UK in years when it listed in June 2024.

There will be widespread disappointment then to see its latest results prompt further share price losses with the stock still above its IPO price but down materially from the levels seen at the start of this year. This reflects concern that the group will face real pain from tariffs on components – despite the company largely dismissing these concerns.

Revenue and profit are meaningfully lower for the period as the company has struggled to match a strong first half of last year – the company’s attempt to get the market to focus on a sequential improvement on the second half of last year is failing pretty miserably.

Founded by chief executive Eben Upton in 2012 with the premise of making computing ‘more accessible to young people’, Raspberry Pi designs and develops low-cost SBCs (single board computers) and computer models for industrial customers, enthusiasts and educators around the world.

The company is still relatively immature and investors can probably not expect profits to go up in a straight line, nonetheless any further disappointments and it may find that patience is running thin on the ground.