Growth slowed at AIM-quoted telecoms enterprise software provider Cerillion (LON:CER) last year, but that was due to the timing of contract wins. This year growth will accelerate because of contracts already won and there could be further wins in the coming months.

In the year to September 2025, revenues were 4% ahead at £45.4m – they were lower at the interim stage. Underlying pre-tax profit was 10% higher at £21.8m. The total dividend is 15.4p/share, up 17%. Net cash is £34.4m.

New orders were 25% higher at £47.6m. There was a contract with an existing customer worth £25.3m in total that was won at the end of the period. Including recurring maintenance and other revenues, there is around £25m of revenues already booked for this financial year.

The potential sales pipeline is at a new record level of £275m even after the recent contract wins. There is continued investment in technology, including AI.

Mergers in Cerillion’s market sector are likely to reduce competition at tenders and they are also providing opportunities to take on experienced staff from the merged entities.

Panmure Liberum forecasts 2025-26 revenues of £54m, while margins are likely to decline from their current high levels due to investment in additional sales staff. Pre-tax profit is forecast at £22.7m, rising to £24.9m next year. Cerillion tends to beat forecasts and a large contact win early enough in the year would boost the current forecast.  

The share price is 55p higher at 1410p, but it is 19% lower this year. The prospective multiple is 24 and cash will continue to increase.

The FTSE 100 was higher on Monday as mining companies helped lift the index after BHP called time on its pursuit of Anglo American.

Traders will also find confidence in a strong rebound in US stocks on Friday, which will ease concerns about AI valuations and the outlook for interest rates.

London’s leading index was 10 points higher at the time of writing as traders eyed this week’s Budget and potential implications for UK markets.

“Equities up, gold down, bitcoin stable – this is a remarkably different picture than last week’s troubling scenes that dogged financial markets,” says Russ Mould, investment director at AJ Bell.

“It suggests investors have had time to collect their thoughts over the weekend, and to start the new week in a calmer mood. It also helps that Ukraine peace talks have dominated the news agenda, giving hope to investors and individuals around the world.”

The FTSE 100 had been higher earlier in the session, but the rally faded as the session progressed. Investors will look to US markets for the next catalyst as cash trading gets underway this afternoon.

The mining sector was the key driving force behind the gains after BHP pulled out of its pursuit of Anglo American, saying ‘it is no longer considering a combination of the two companies.’

BHP’s decision boosted the miners as investors positioned for possible M&A elsewhere in the sector.

“Miners were in vogue amid ongoing M&A activity in the sector. News that BHP has walked away from a second attempt to buy Anglo American has left investors hungry for action elsewhere,” Russ Mould said.

“Glencore was among the top risers on the FTSE as it is seen as a potential merger candidate for one of the big players, or as a buyer itself.”

Glencore rose 1.9% but it was the precious metals miners that had their noses out in front. Endeavour Mining was the top riser with a 3.7% gain, while Fresnillo rose 3.1%.

BAE Systems and Babcock were the biggest decliners, with talks to end the war in Ukraine underway. BAE Systems lost 2% and Babcock fell 1.9%.

There was a tinge of weakness in UK-centric sectors such as retailers and some financials ahead of Wednesday’s Budget.

S4 Capital shares fell on Monday after the marketing group downgraded its full-year guidance following weaker-than-expected October performance.

The digital advertising group now expects 2025 like-for-like net revenue to fall just under 10%.

Shares were down 9% at the time of writing.

The revenue shortfall will hit profitability hard. Operational EBITDA is now targeted at approximately £75 million, significantly below the £81.6 million market consensus. Management blamed lower project-based revenue, continued client caution, and slower-than-anticipated conversion of new business wins.

S4’s struggles mirror those of WPP, which is also facing difficulties in the current environment.

The company has already implemented cost-cutting measures this year. However, liquidity remains stronger than forecast, with year-end net debt still expected between £100 million and £140 million.

For those who believe in the long-term adoption of artificial intelligence, the recent sell-off of the world’s largest AI-focused names will present an opportunity.

Concerns about valuations and the circular nature of investments, partnerships, and commercial relationships have led to dramatic pullbacks in companies at the forefront of the AI arms race. 

Frothy valuations have inevitably drawn comparisons to the Dotcom boom and bust, and a growing number of analysts are calling a bubble. 

But many aren’t and still believe there are legs in the AI trade as the technology is implemented across the global economy. 

If you’re in the latter camp, these three AI stocks are well worth a look.

Nvidia

Nvidia is an obvious choice, but we’d be amiss to omit the world’s biggest AI stock from the selection. 

Recent results were initially well received, as the chipmaker beat revenue estimates and provided encouraging guidance. However, nagging doubts about supply chain constraints and whether they will be able to sell their most powerful chips to China helped fuel a reversal on the day of release.

Nvidia’s meteoric rise makes it an easy target for the naysayers. Softbank selling its entire stake hasn’t helped either. But you can’t argue against its scale and revenue generation.

The firm generated record revenue of $57.0bn in Q3, up 22% from Q2 and 62% more than a year ago. Growth was driven by data centre revenue, which rose 25% to $51bn.

The company is still experiencing soaring demand for its chips, especially for its flagship data centre Blackwell products.

“Blackwell sales are off the charts, and cloud GPUs are sold out,” said Jensen Huang, CEO of Nvidia, in their recent earnings release.

“Compute demand keeps accelerating and compounding across training and inference — each growing exponentially. We’ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.”

The recent pullback sees Nvidia trading at just 23x forward earnings. That isn’t expensive at all.

ASML

ASML is a Netherlands-based company that manufactures the world’s most advanced lithography machines, which are essential equipment for producing semiconductors. 

Their extreme ultraviolet (EUV) lithography systems are the only tools capable of creating the tiny, densely packed transistors needed for the most powerful AI chips from companies like Nvidia, AMD, and Taiwan Semiconductor Manufacturing Company. 

Without ASML’s technology, it would be impossible to manufacture the sophisticated processors that power large language models, data centres, and AI training systems. 

No ASML would mean no chips and no AI boom.

ASML’s deep moat is likely the reason its shares are trading just 15% below recent highs. The stock certainly isn’t in bargain territory, but the dip looks like one that could be bought into.

Vistra Corp

AI data centres are expected to consume around 12% of total US power by 2030, up from 4% in 2023.

Vistra Corp is one of the largest power generators in the United States, operating a diverse portfolio of nuclear, natural gas, coal, solar, and battery storage facilities that produce approximately 41,000 megawatts of electricity. 

Imagine SSE with some fossil fuels and nuclear thrown into the mix. 

Vistra has become increasingly important to AI development because data centers require significant amounts of reliable, constant electricity to power their servers and cooling systems. 

Vistra’s nuclear plants are particularly valuable for AI infrastructure since they provide 24/7 carbon-free baseload power, making the company a key supplier for tech companies building AI data centers. 

As well as using its existing capacity to power AI data centres, Vistra is exploring co-location partnerships to build new power facilities near new data centres to secure stable power flow.

After hitting a 52-week high of $219, Vistra shares have fallen to $168. Although shares are substantially lower than recent highs, their historical valuation still looks rich at around 40x trailing earnings. Analysts, however, expect earnings to pick up significantly in the coming years with forward earnings multiples around 20x.