Rolls-Royce shares stall as aviation headwinds meet AI demand
Shares have traded in a 1,095p–1,340p range since February as Middle East disruption and higher jet fuel hit civil aviation; data‑centre power orders rose 50% and backlog reached £7.3bn.
Rolls‑Royce shares have been confined to a 1,095p–1,340p trading range since February as disruption in the Middle East and elevated jet fuel prices weighed on its civil aviation business, while the company’s power division reported a surge in data‑centre orders.
An industry report warned that airline profits will decline this year because of conflict-related disruption and higher fuel costs, a development the company identified as a headwind for its civil aviation operations.
Rolls‑Royce management has maintained the group remains on track to meet its targets and noted most of the current airline disruption has affected narrow‑body aircraft, whereas the company focuses mainly on the wide‑body market.
Cost inflation and supply‑chain strains are creating operational pressure. Airbus has flagged potential shortfalls in A320 deliveries linked to problems at another engine supplier; those narrow‑body issues are separate from Rolls‑Royce’s work on the Airbus A350 and A330neo, but underline broader industry strains that can affect suppliers.
The power segment reported a 50% rise in power generation order intake in the first quarter, lifting the division’s backlog to £7.3bn. The business produces MTU backup generators and other power systems used by major cloud operators to provide backup power when grids fail.
Technical indicators on the share chart show a prolonged consolidation inside the year-to-date range. Some market participants view the pattern as a continuation formation, while momentum measures such as the Relative Strength Index and the Percentage Price Oscillator have declined. A sustained break above the upper end of the range would bring 1,500p into focus.
Rolls‑Royce remains one of Europe’s largest industrial groups, with operations spanning civil and defence aerospace engines and power systems. The recent trading update highlighted contrasting short‑term pressures in civil aviation and increased demand for equipment serving data centres.
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