TheChek News Flow

Despite endlessly fiddling with its brand, the luxury group still seems to stand for something in consumers’ minds

Luxury lore holds that, once a brand has lost its mojo, it is very hard to make it desirable again. And luring customers back into the store is all the more challenging when economies are slowing and there is less money to throw around. 

By that logic, Burberry’s turnaround ambitions should be a long shot. We are clearly in a bleak luxury environment — as evidenced by LVMH’s sales. Yet unlike other would-be recovery plays — see Gucci parent Kering — the British purveyor of posh raincoats is relatively well positioned. Tuesday’s results, which drove the stock up 18 per cent, highlight the reasons why. 

The main thing is that, despite endlessly fiddling around with its brand, Burberry still seems to stand for something in consumers’ minds. Its “heritage” is inextricably tied up with Britishness — of the solid breakfast, Savile Row, Kate Winslet caught in the rain variety.

Compared with Gucci, which has by turns embraced outlandish design and quiet luxury, that puts Burberry in the enviable position of not needing to build awareness. Simply binning some of its racier fashion ideas — as newish chief executive Joshua Schulman, who joined in July 2024 from Michael Kors is doing — can staunch losses.

For evidence, take a look at the group’s sales trajectory. A 5 per cent decline in comparable retail revenue over the past six months may not immediately look like a win. But that is a whole lot better than the 20 per cent fall the group suffered in the previous six months.

What’s more, Burberry seems to have weathered the post-Christmas luxury slump better than peers. Sales in the first quarter of the year were sequentially less dismal than the industry’s overall 5 percentage point decline, according to Deutsche Bank analysis. That is not what one would expect. Strapped customers tend to focus their purchases on hot brands, rather than those going through a revamp. So it looks like Burberry’s strategy of repositioning itself as an expensive but not extortionate outerwear provider may be starting to bear fruit.

The second reason Burberry looks increasingly alluring is that it comes, relatively speaking, cheap. The group is trading at 1.8 times 2026 sales, on S&P Capital IQ estimates, compared with Kering on 2.5. Imagine that Burberry managed its goal of returning to £3bn of revenues, 20 per cent higher than where it is now, and roughly its size in 2023, and an operating margin in the high teens. It would then be trading on about nine times operating profit, about half LVMH’s valuation.

With so much in luxury coming down to the “je ne sais quoi”, ineffable qualities that spell the difference between bang on trend or yesterday’s news, it is hard to bet on the shape of things to come. But Burberry is worth trying on for size.

Chinese missiles were used by Pakistan to destroy an Indian air defence system last week in what is believed to be their first combat use

Chinese state media has hailed what is believed to be the first combat use of the country’s hypersonic missiles, after Pakistan claimed they were used to destroy an Indian S-400 air defence system last week.

Describing it as the dawn of a new era in warfare, official news agency Xinhua reported on Saturday that Pakistan’s air strike had destroyed India’s Russian-built air defence system in Adampur, in the border state of Punjab.

Tensions escalated last week between India and Pakistan after New Delhi launched air strikes on Pakistan-administered Kashmir on Wednesday. India said it was responding to a militant attack on tourists in Indian-administered Kashmir last month – a deadly attack that Islamabad has denied being involved in.

Following days of military exchanges, the two neighbours agreed to a ceasefire on Saturday that appears to be holding.

During the fighting, Pakistan carried out a strike that was “executed using hypersonic missiles launched from the JF-17”, a Chinese fighter jet, Xinhua reported, quoting a statement from Pakistan’s military.

“Precision-guided munitions were used to neutralise the advanced air defence asset,” the statement said.

Footage released by Pakistani authorities shows two CM-400AKG missiles being used to carry out the mission. They were made by the China Aerospace Science and Industry Corporation, or CASIC.

Details of the technology behind the operation were revealed days later by China Space News, a state-controlled publication co-sponsored by CASIC and China Aerospace Science and Technology Corporation.

The China Space News report on Tuesday highlighted the speed and manoeuvrability of the missiles, but also what it called a breakthrough in their guidance technology.

It said precision guidance was the key to “stand-off strikes” – attacks launched from beyond the reach of enemy defences such as the one that destroyed India’s air defence system.

The Chinese hypersonic missiles use a guidance system that combines technologies such as inertial navigation and satellite positioning that makes them more accurate, gives them a longer range and makes them harder to jam, according to the report. As a result, it said strikes could now target specific high-value threats rather than relying on broad area attacks.

“This breakthrough in precision guidance technology lays the foundation for beyond-visual-range strikes,” the report said.

It also highlighted the use of “man-in-the-loop” technology, where operators can adjust targets in real time as the missile nears impact – useful for hitting moving or suddenly detected targets.

It said faster engines also helped the missiles break through enemy defences quicker, leaving less time for interception.

Modern stand-off strikes no longer depend on a single weapon or platform, instead using a coordinated network of launchers, early warning aircraft, drones and satellites. The aircraft and satellites provide real-time target data, while drones handle scouting and damage checks.

That means launch platforms can fire from hidden locations and retreat quickly, while other parts of the system take over guidance, making the operation safer and more effective.

These advanced strike methods are also used by other lower cost weapons like upgraded rocket launchers and drones, which are now part of wider, coordinated attack networks. Rocket artillery, once used mainly for area bombardment, has become more precise thanks to modular designs and satellite-guided targeting, allowing it to strike both frontline and deep targets in real time.

Drones and loitering munitions are also playing a growing role. They can fly at low altitudes to avoid detection and offer a cheaper, more flexible way to carry out stand-off strikes with support from artificial intelligence.

The Indian air defence system destroyed last week – the S-400 Triumf – is one of the world’s most advanced, made by Almaz-Antey, Russia’s largest arms maker. It costs around US$1.5 billion and can hit targets up to 400km (250 miles) away and at an altitude of 30km (98,000 feet), including fighter jets, drones, cruise missiles and ballistic missiles.

Xinhua in its report cited military analysts as saying that the destruction of the S-400 could have far-reaching implications for India’s aerial defence and regional deterrence.

Maxime Picat, one of two internal candidates for next group CEO, ‘shocked’ at foreign groups’ loss of market share

Western brands may not have a future in China as local carmakers close in on the last remaining stronghold held by the likes of Volkswagen and Toyota, Stellantis has warned.

Asked whether western auto groups would be able to compete with local brands in China, Maxime Picat, Stellantis’s chief operating officer for Asia-Pacific, Middle East & Africa, and one of the two internal candidates to become the next group chief executive, said: “I’m quite an optimistic guy, but not on that one.”

Local brands have taken significant market share in China from foreign carmakers across electric car and larger vehicle segments, but brands such as Toyota and Volkswagen still sell large volumes of mid-sized petrol vehicles, known as the “C-segment”.

“I was shocked,” said Picat at the FT’s Future of the Car summit, pointing to the expanding offensive of local brands in all vehicle segments. This means that western carmakers are left with the “internal combustion engine C-segment. And that will not last,” he added.

“If you look at what has happened across recent years, the trend [of falling market share] is strong and it’s been very difficult for western [carmakers] to keep their position in China,” he said.

While many western companies, including Stellantis, have gradually retreated from China amid fierce competition and a bruising price war, German manufacturers such as Volkswagen have doubled down on a market that has long been a source of profits.

Volkswagen, Toyota and other foreign brands have adopted the “in China for China” strategy to win back consumers who have shifted to more affordable and tech-packed electric vehicles from homegrown brands. Last year, VW announced a further €2.5bn investment in China.

Foreign brands’ market share in China stood at 32 per cent in the first two months of this year, less than half the 64 per cent they held in 2020. BYD has overtaken Volkswagen’s long-held position as the best-selling brand, according to Shanghai consultancy Automobility.

But Volkswagen and Toyota are still the top two manufacturers of petrol vehicles in China with a combined market share of 34 per cent.

After winding down its ventures in China, Stellantis — the owner of Peugeot, Fiat, Opel and other brands — took a 20 per cent stake in Leapmotor for €1.5bn and is helping the Chinese start-up grow sales in China and Europe.

In an effort to signal its commitment to the Chinese market, VW has been a vocal critic of the EU’s anti-subsidy tariffs on Chinese EV imports — a divisive issue that has split German carmakers from supporters of the measures, such as Stellantis and Renault, which have little exposure to the Chinese market.

Picat has emerged alongside Stellantis’s North American boss Antonio Filosa as a two internal candidates to replace Carlos Tavares, who left Stellantis in December after strategy disagreements.

Asked about the plan to find a replacement for Tavares, Picat said: “The board has started a very comprehensive process which is important . . . and they have announced the timing so everything is under control and that will be a good decision, whatever the decision.”

The chip manufacturer is growing fast despite headwinds, yet its valuation has fallen, creating a buying opportunity

Artificial intelligence depends on Nvidia’s computer chips. Nvidia depends on Taiwan Semiconductor Manufacturing Co. to make those chips. Right now, TSMC is in many ways the better way to invest in AI for the long term.

TSMC and Nvidia are closely linked in business and in the stock market. Both companies’ stocks have soared on the back of the AI boom and both are down this year, partly as a result of President Donald Trump’s tariff threats.

The market turned around this week after Trump declared a cease fire in the trade war. The two chip stocks bounced back too, with TSMC rising almost 9%, but they are both still down for the year. As a result, even after the market broadly recovered this week, the two semiconductor companies are still down more than the S&P 500 index in 2025.

The connection between the stocks means that investors are missing some of TSMC’s positives. Valuations, tariffs and competition all tip in its favor right now.

“If you believe that AI is really going to transform big parts of the world, every AI chip out there needs to be manufactured by someone, and the only manufacturer leading AI chips today is TSMC,” said Sean Sun, portfolio manager at Thornburg Investment Management.

Tariffs, at whatever level they end up, will likely have only a modest impact on TSMC, given that its chips are indispensable for AI data centers. Its executives told investors on its earnings call on April 17 that they hadn’t seen any signs of falling demand from its main AI customers, and they reaffirmed their previous projection that the company would double its revenue from making AI chips in 2025.

It’s also promising that over the last few weeks, the tech giants fueling the AI boom, including Microsoft, Alphabet and Meta Platforms, reassured investors they didn’t plan to slow their AI spending this year.

TSMC’s sales in April grew 48% to over $11 billion, the company said. It also reaffirmed that it expects to grow sales by close to 20% in each of the next five years, including 2025.

A key selling point for TSMC now is its valuation. TSMC is currently trading at a forward price-to-earnings ratio of 15.7 times, well below its average multiple of 19 times over the last five years. “I don’t think [TSMC stock is] expensive at all just because of the growth trajectory they’re facing in the next five years,” said Rihard Jarc, who runs a small firm called New Era Funds and writes a tech blog.

Nvidia trades at a forward price-to-earnings ratio of nearly 30 times, while the S&P 500 Index is around 21 times forward earnings. Nvidia’s valuation premium makes sense because it has better margins than TSMC.

TSMC has several advantages over Nvidia. The company can handle the complex manufacturing tasks required by Nvidia’s competitors such as Google and Amazon, which are designing their own chips for some AI workloads, said Jarc. These chips represent potential competition for Nvidia.

“The reason why I don’t have Nvidia and I do have TSMC in my portfolio is because I see them as a winner in every case,” said Jarc.

To be sure, TSMC faces real risks. For one thing, it tends to rise and fall with the broader semiconductor industry, which can be volatile partly because its capital-intensive nature makes it difficult for companies to respond quickly to shifts in demand.

“Semiconductor stocks are cyclical, and they’re not necessarily defensive in a broader global recession or anything like that, so I think that’s why it’s probably trading a little bit of a discount. But as a long-term investor, we’re thinking about it through cycles,” Thornburg’s Sun said.

As the first company to go full speed ahead solely as a chip manufacturer, TSMC has built a huge technological advantage in creating the most cutting-edge silicon. The company captured 67% of global chip manufacturing revenues in the last quarter of 2024, an increase from the sub-60% share it had for most of 2023, according to the latest data from Counterpoint Research.

“If you go back many, many decades ago, there were lots and lots of competitors. But as the nodes have gotten smaller and smaller, you’ve seen it become a smaller number of players over time,” Sun said. “Once you fall off that technology curve, you don’t get back on.”

Perhaps the biggest but most uncertain risk for TSMC would be a Chinese move to reclaim Taiwan as its own territory, through either a blockade or a direct attack. Indeed, Sun said, such a move is a “black swan event” that would be disastrous for the global economy. But, he added, “some of that is reflected in TSMC’s multiple already, probably more so than it deserves,” leading TSMC’s shares to be “unfairly discounted relative to the actual risk.”

TSMC is trying to get ahead of the twin threats of Chinese actions and U.S. tariffs by moving to diversify its operations geographically and reduce its dependence on Taiwan. Earlier this year it pledged to spend an additional $100 billion over the next four years on manufacturing plants in the U.S.

It plans to use that money to build out a total of six new manufacturing plants in Arizona, where executives say they expect to manufacture nearly one-third of their most advanced chips. TSMC also started building its first plant in Europe last year and started mass production at another overseas facility in Japan.

While making chips in countries where labor is more expensive than in Taiwan will cut the company’s gross margin by a few percentage points, according to its executives, investors are confident that TSMC can ease the impact by hiking its prices—something its customers seem likely to accept.

Google is bringing Gemini, its generative AI, to all cars that support Android Auto in the next few months, the company announced at its Android Show ahead of the company’s 2025 I/O developer conference.

The company says adding Gemini functionality to Android Auto and, later this year, to cars that run Google’s built-in operating system, will make driving “more productive — and fun” in the blog post.

“This is really going to be, we think, one of the largest transformations in the in-vehicle experience that we’ve seen in a very, very long time,” Patrick Brady, the VP of Android for Cars, said during a virtual briefing with members of the media ahead of the conference.

Gemini will surface in the Android Auto experience in two main ways.

Gemini will act as a much more powerful smart voice assistant. Drivers (or passengers — Brady said they are not voice-matching to whoever owns the phone running the Android Auto experience) will be able to ask Gemini to send texts, play music, and basically do all the things Google Assistant was already able to do. The difference is users won’t have to be so robotic with their commands thanks to the natural language capabilities of Gemini.

Gemini can also “remember” things like whether a contact prefers receiving text messages in a particular language, and handle that translation for the user. And Google claims Gemini will be capable of doing one of the most commonly paraded in-car tech demos: finding good restaurants along a planned route. Of course, Brady said Gemini will be able to mine Google listings and reviews to respond to more specific requests (like “taco places with vegan options”).

The other main way Gemini will surface is with what Google is calling “Gemini Live,” which is an option where the digital AI is essentially always listening and ready to engage in full conversations about … whatever. Brady said those conversations could be about everything from travel ideas for spring break, to brainstorming recipes a 10-year-old would like, to “Roman history.”

If that all sounds a bit distracting, Brady said Google believes it won’t be. He claimed the natural language capabilities will make it easier to ask Android Auto to do specific tasks with less fuss, and therefore Gemini will “reduce cognitive load.”

It’s a bold claim to make at a time when people are clamoring for car companies to move away from touchscreens and bring back physical knobs and buttons — a request many of those companies are starting to oblige.

There’s a lot still being sorted out. For now, Gemini will leverage Google’s cloud processing to operate in both Android Auto and on cars with Google Built-In. But Brady said Google is working with automakers “to build in more compute so that [Gemnini] can run at the edge,” which would help not only with performance but with reliability — a challenging factor in a moving vehicle that may be latching onto new cell towers every few minutes.

Modern cars also generate a lot of data from onboard sensors, and on some models, even interior and exterior cameras. Brady said Google has “nothing to announce” about whether Gemini could leverage that multi-modal data, and that “we’ve been talking about that a lot.”

“We definitely think as cars have more and more cameras, there’s some really, really interesting use cases in the future here,” he said.

Gemini on Android Auto and Google Built-In will be coming to all countries that already have access to the company’s generative AI model, and will support more than 40 languages.

Check out how to watch the livestream and more from Google I/O.