Daily market update: Alphabet, Intel, WPP, Evoke, Mobico

“Another strong session on Wall Street yesterday lifted spirits at the end of the trading week, resulting in small but welcome gains across much of European equities markets on Friday,” says Russ Mould, Investment Director at AJ Bell.

“France and Spain led the way with 0.3% gains apiece, while the FTSE 100 tried its hardest to keep its head above water in early trading. Industrials, energy and real estate were in demand on the UK market while utilities and healthcare went off the boil.

“The past three weeks have been chaotic and investors have been subjected to a whirlwind of events. That chaos is now easing away and replaced by a tentative feeling of serenity. Donald Trump could easily turn markets back on their head with a single remark, but for now, we can embrace a moment of calm.

“First, we had indications that the Trump administration might soften its tone in the fight against China. Now we have reports that China might exempt certain US imports from tariffs. While tariffs are unlikely to go away completely, any easing of the trade war will be lapped up by financial markets.”

Alphabet

“The market was nervous ahead of Alphabet’s first-quarter figures – not because of the backwards-looking numbers but rather what management would say about the outlook. The company managed to calm nerves but clear risks remain to its earnings as the year goes on.

“Alphabet delivered the financial goods, beating earnings expectations for the ninth quarter in a row. Revenue was also higher than forecast, helping to put it back on the outperformance track after a blip in the previous quarter where it delivered uncharacteristically lower-than-predicted figures.

“The search business is trucking along while cloud computing remains on high power thanks to companies around the world rolling out AI services. Investors liked what they saw and the shares moved higher in pre-market trading. So far, so good, but there are lingering concerns which could make it harder for the stock to sustain any share price rally.

“Uncertainty around the economic impact of tariffs will almost certainly cause certain companies to scale back advertising spend. Alphabet seemed to dance around questions on this topic during the conference call and not give a straight answer apart from noting issues involving Asia Pacific retailers would cause ‘slight headwinds’ to its ads business. Duties on small packages entering the US have led to Chinese firms like Temu reducing their promotional spending on key online platforms including Google.

“Alphabet argues that it can still play an important role to clients during uncertain times by providing deep insights into changing customer behaviour. That sort of information won’t come for free.

“Any major economic setback might also cause companies to scale back AI-related spending and that poses a big risk to growth rates for Alphabet’s cloud computing arm.

“Against an uncertain backdrop, investors might be alarmed by Alphabet sticking to its plan to spend $75 billion in capex this year across its business. That’s big bucks and the market will want to be sure it isn’t wasted money.”

Intel

“Tariffs look to be a double-edged sword for chip manufacturer Intel. While they have boosted demand for its older and cheaper chips in the short term, the risk of recession means the company is notably downbeat on the outlook.

“Intel may have beaten forecasts in the first three months of the year but this performance was delivered against a different backdrop to the one facing the business today.

“It all adds up to a demanding in-tray for recently appointed boss Lip-Bu Tan. Make no mistake, Intel was in a mess well before the Trump administration unveiled its trade policy and it is prudent for Tan to keep a lid on expectations.

“He is also pulling another classic turnaround lever – firming up plans for significant job cuts to reduce costs.

“There remain unanswered questions about the destiny of Intel’s loss-making foundry business and whether the company might bring in an external partner – having had discussions with Taiwanese giant TSMC – or exit the business altogether.”

WPP

“WPP has historically been seen as a bellwether for the global economy. Companies are more willing to spend money on advertising when they are feeling bullish about their prospects and, conversely, dial back spending when they are feeling less confident.

“Given the breadth of WPP’s operations its performance offers insight into how businesses are feeling across the globe and the worse-than-expected first quarter like-for-like revenue is not encouraging in this regard.

“After all, this is before the tariff turmoil reached its zenith and while WPP is sticking with its full-year guidance for now, this could be tested through the course of 2025.

“Investors were on the ball and spotted the risks a while ago, explaining why WPP shares had already weakened before the latest update and why they enjoyed a small bounce now as keeping guidance implies that management don’t see things getting any worse.”

Evoke

“William Hill owner Evoke has done what it said it would when posting its full-year results in March and is also sticking with its full-year guidance. There is enough in this latest statement to suggest CEO Per Widerström may be making some progress with his turnaround efforts at the gambling firm.

“International markets were strong and there was an appreciable increase in earnings while investment in new gaming cabinets seems to be paying off. The company has also been upgrading its technology platform and online infrastructure – important background work which could yield results in the longer term.

“On the negative side, the online business in UK and Ireland and betting shops saw revenue declines. Fewer active players for web-based gambling were partly evened out by a large increase in average revenue per user.

“Regulatory pressures remain an ongoing issue for Evoke and other operators. Having retreated from the US market, after struggling to build sufficient scale across the Atlantic, Evoke is missing a growth driver enjoyed by some of its UK-listed peers.”

Mobico

“If Mobico's latest update was one of the company's coaches it would be sent straight to the scrap yard.

“The price it got for the US school bus business was less than expected. Compounding the shock to the market was the forecast of full year adjusted operating profit at the lower end of guidance and, at the headline level, Mobico warning of a significant loss for 2024 thanks to write-offs and provisions relating to tax, goodwill and contracts in its German business.

“There is a growing list of negative factors putting Mobico in the slow lane. Long-running issues coming out of the pandemic have hurt the company; a lacklustre corporate rebrand of National Express seems to have gained limited traction and last March, results had to be delayed thanks to audit issues.”

These articles are for information purposes only and are not a personal recommendation or advice.