In Q1 2025, the Paris Stock Exchange saw a notable 5.55% rise in the CAC 40 index, driven by strong performances from Thales and banking stocks. Thales surged by 77.14%, benefiting from geopolitical tensions, while Société Générale and BNP Paribas also rebounded significantly. However, Kering, Stellantis, and STMicroelectronics faced substantial declines, grappling with market challenges, including a slowdown in luxury sales and diminishing demand in semiconductors. Overall, the quarter highlighted both growth and vulnerabilities in various sectors.
The Positive Surge of the Paris Stock Exchange in Q1 2025
The Paris Stock Exchange kicked off 2025 on a high note, showcasing a remarkable 5.55% increase in its flagship index, the CAC 40. This impressive performance signals a vibrant start to the year, fueled by several stocks that achieved significant gains. Let’s delve into the companies that made a lasting impact during these first three months.
This quarter has been characterized by a notable rebound in certain sectors that previously faced challenges, particularly within the banking industry. However, it has also shed light on the vulnerabilities of some major players, such as Kering and Stellantis, who are grappling with less favorable market conditions and unmet expectations.
Top Performers of the CAC 40: Thales and Banking Stocks Shine
Leading the charge this quarter is Thales, which boasts an incredible rise of +77.14%, marking the best performance among its peers. Specializing in defense and cybersecurity, the company is reaping the benefits from a tense geopolitical landscape. In 2024, Thales reported revenues of 20.58 billion euros, reflecting an organic growth of 8.3% compared to the previous year. This robust performance has instilled confidence in investors, significantly boosting the stock’s valuation.
Additionally, the resurgence of banking stocks is noteworthy. After a prolonged period of stagnation, Société Générale (+52.39%), BNP Paribas (+29.87%), and Crédit Agricole (+26.22%) are once again attracting investor interest. Their revival can be attributed to rising interest rates, which have enhanced their net margins after enduring a decade of near-zero rates. The year 2024 marked a turning point for these banks, which has been further solidified by an enthusiastic start to 2025.
Following in the footsteps of these leaders, other companies have also exhibited remarkable growth:
- Bouygues: +27.58%, propelled by construction and telecom sectors
- ArcelorMittal: +18.01%, benefiting from increased steel demand
- Engie: +17.80%, driven by ventures in renewable energy
- Veolia Environnement: +17.12%, supported by the energy transition
- Vinci: +16.60%, despite a recent market correction
- AXA: +14.08%, achieving a record net profit of 7.89 billion euros in 2024, a 10% increase
Challenges Faced by Kering, Stellantis, and STMicroelectronics
Despite the overall upward trend, the quarter saw some notable underperformers, and the declines were quite stark for big names within the CAC 40.
Kering experienced the most significant drop, falling by -19.87%. This decline stems from a pronounced slowdown in the luxury market, particularly in China. The company, already reeling from disappointing 2024 results, is struggling to enhance its outlook.
The automotive sector is not immune to challenges either, with Stellantis facing an -18.76% decrease due to declining sales in key markets and the introduction of new tariffs in the United States.
In the semiconductor industry, STMicroelectronics encountered a -17.61% drop as global demand wanes. Similarly, Schneider Electric (-12.52%) and Capgemini (-12.71%) saw declines due to profit-taking and growth uncertainties.
The communications sector faced its own setbacks, with Publicis Groupe declining by -15.79% and Pernod Ricard losing -16.28%, impacted by diminishing international sales.
Lastly, LVMH and Accor Hotels reported declines of -10.04% and -10.95%, respectively, as they adjust to post-Covid normalization and a slowdown in tourism.