The Week Ahead (7-11 Sept): borrowing costs, fuel prices, Anthropic IPO + Computacenter and Adobe

Welcome back to The Week Ahead. Last week I wrote about rising government bond yields and oil and gas prices. All of these have continued to rise over the last week:

US bond yields are higher following the hawkish tone struck by Fed Chair Kevin Warsh at Jackson Hole last week. Warsh said the Fed would have “work to do” unless inflation started to ease quite quickly.

Two other Fed officials have struck a slightly more dovish tone since then, suggesting they might vote to leave rates unchanged. But markets are still pricing in a c.50% chance that the Fed will raise rates at its September 16 meeting.

Energy prices have risen further this week as the conflict in the Middle East heated up once more. The US has carried out military strikes on Iranian targets, while continuing to try and implement a safe passage on the Omani side of the Strait of Hormuz.

The resulting surge in US diesel prices is unlikely to sit well with US consumers. President Trump is reported to have called refinery bosses into the White House to discuss ways to ease prices – the only real option appears to be an export ban. That could have uncomfortable implications for net importers elsewhere.

The next mega IPO? In markets, reports suggest Claude AI maker Anthropic may be planning to publish its IPO prospectus after Labour Day (Monday) next week, ahead of a planned float in late September or October. Anthropic is said to be trying to raise around $130bn, which would give the business a $2trn market cap.

Economic news

There isn’t much major economic news scheduled next week, with the possible exceptions the European Central Bank interest rate decision on Thursday (when another hike seems possible) and US inflation on Friday.

Here in the UK, the housing market may claim some headlines, with two major house price surveys due to release monthly data. The recently renamed Lloyds House Price Index (previously Halifax) and the more forward-looking Royal Institute of Chartered Surveyors (RICS) index are both due during the week.

Last week’s Nationwide HPI found house prices rose by 0.2% in August on subdued volumes, but the lender did note that affordability has now fallen back to its 25-year average level:

Any increase in affordability will be good news for housebuilders, whose pricing and margins are under pressure. However, with the likelihood of mortgage rates rising in the near future to reflect higher gilt yields, any benefit to homebuyers (or sellers) may be minimal. 

Interim results next week from estate agency group Property Franchise (LON:TPFG) may also be worth watching for further insight into the housing market. 

Company news

The UK doesn’t have many big AI firms and it’s not home to any of the hyperscalers; companies such as Alphabet (NSQ:GOOGL) and Amazon.com (NSQ:AMZN) that operate huge global networks of data centres to provide cloud-based services.

While investing directly in US shares is relatively cheap and easy, UK investors wanting exposure to the AI build-out in their home market have also had options. A strategy that’s worked well this time round is a pick and shovel approach – investing in key suppliers to the hyperscalers.

One company that’s been very successful in this area is Volex (LON:VLX). This cabling specialist was the subject of this week’s Stock Pitch from Ed Sheldon. It’s benefited from surging demand for complex, high-margin cabling assemblies for new data centres – we covered the company’s latest upgrade to profit guidance here.

Another business stock that has successfully leveraged the AI data centre boom is valued-added IT reseller Computacenter (LON:CCC) (disc: I hold), which reports half-year results on Tuesday.

Volex and Computacenter have both outperformed some of the biggest names in US tech over the last couple of years:

Computacenter (LON:CCC)

This founder-owned business has had the same CEO since 1994 and recently joined the FTSE 100.

Following a series of upgrades over the last 12 months, Computacenter’s 2026 revenue is now expected to be 65% higher than in 2024.

Earnings forecasts are 20% higher than they were 12 months ago:

Growth has been driven by rapid growth in the group’s US operations, where Computacenter supplies technology to hyperscaler customers who are fitting out new data centres. We can see the scale of this pickup by tracking half-yearly revenue from the group’s Technology Sourcing division since the start of 2024:

• H1 2024: £3,740m

• H2 2024: £4,538m (+21% vs H1 24)

• H1 2025: £4,857m (+7% vs H2 24)

• H2 2025: £6,441m (+33% vs H1 25)

This momentum has been amply reflected in the group’s share price, which has risen by 130% over the last 12 months:

The opportunity here is for the company to use its growth in US technology sourcing to expand its footprint in higher margin and more durable professional services. Computacenter has made a number of bolt-on acquisitions in the US over the last year or so with this focus in mind.

However, the risk (certainty?) is that this AI-led spending surge will unwind at some point, leading to a fall in profit.

Computacenter’s share price has already outpaced its profit growth by a considerable margin. This has seen the stock re-rate onto a historically high multiple of earnings, as we can see from the PE range chart on the StockReport:

While the stock’s forward P/E of 23 may not seem outrageous, the shares look much more expensive when measured against six-year and 10-year average earnings:

Ultimately, I think the AI boom will come to a halt when the big players start to find it more difficult to raise funds. Said differently, spending will slow if it becomes apparent that returns are falling below the levels required to justify further investment.

Right now, there’s no sign that funding is drying up. Against this backdrop, Computacenter could continue to deliver strong growth and perhaps further upgrades. The company is a much bigger business than it was 10 years ago and appears to have timed its acquisition-led US expansion (since c.2018) very well.

The StockRanks also support a continued positive view, with super-strong momentum and High Flyer styling:

I see this as a quality business with excellent management and the long-term benefit of continued founder ownership:

I’m happy to ride out a slowdown to retain some long-term exposure to this business. However, I am unlikely to buy more shares at current levels and may consider taking some profit if the market remains strong.

I’ll be keen to see what long-serving CEO Mike Norris has to say about market conditions and the outlook for the business in next week’s results.

Adobe (NSQ:ADBE)

One sector of the market that’s on my radar at the moment is software. Many big names look unloved following the SaaSpocalypse, which saw established software businesses de-rated on fears their products would be displaced or devalued by AI tools.

I think this is inevitable in some areas of the market, but I don’t think it’s fair to draw blanket conclusions on this basis. Products that provide business-critical systems of record (e.g. accounting) seem unlikely to be replaced, even if they will have to evolve to work happily alongside AI agents (rather than humans).

Specialist tools that are the de facto standard for certain applications seem like another promising area of interest. While I expect to see some casualties, I think some may survive intact due to their importance within workflows and the continued requirement for human-led activity.

One company that is perhaps somewhere in the middle, in terms of risk, is Adobe, which reports its third-quarter earnings on Friday.

Adobe creative products like Photoshop have long been the default choice for professionals and keen amateurs, but much of the functionality (and creativity) they enable can now be substituted by AI tools.

Adobe shares have halved since the start of 2024 and now trade at levels first seen in 2019:

Despite this, the company is both larger and more profitable than it was before the pandemic. So far, at least, efforts to broaden its product range and develop subscription-based offerings have worked quite well:

A falling share price combined with rising profits has left Adobe trading on around 11 times forecast earnings, with a sub-1x PEG ratio:

This seems very modest to me for a business with rising earnings, a sensible balance sheet and super quality metrics:

My impression is that Adobe is being priced as if it’s an ex-growth business – or perhaps even one that’s in decline.

That view is at odds with the near-term outlook, though. Broker forecasts have been upgraded over the last year and suggest double-digit EPS growth over the next 12-18 months:

Adobe reports its third-quarter results on Friday next week. I will be interested to see if the company’s recent momentum continues.

The StockRanks have turned notably more positive since June and the stock’s MomentumRank has risen sharply recently:

I think this story could be worth a closer look.

Have a good weekend!

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Here’s a summary of what’s expected next week.

Economic Calendar

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Companies Reporting

Disclosure: Roland owned shares in Computacenter at the time of publication.