UK shares have been on fire in 2025, with the FTSE 100 reaching a new record high earlier this year. Among these stocks, three companies in particular have been the most popular with British investors: Rolls-Royce, AstraZeneca (LSE:AZN), and Shell.
Being a large international enterprise with established and steady cash flows generally makes for a far less volatile investing experience. Pairing this with the fact these industry titans are typically far more resilient during economic downturns, it’s easy to understand why they’re seemingly so popular among British investors.
So with £3,000 to spare, are these no-brainer buys in 2025?
Digging deeper
Regardless of scale, no business is immune to disruption. This is made perfectly evident when looking at the FTSE 100 today, versus 20 years ago. For example, Vodafone used to be the third-largest business with a market-cap of around £90bn. Today, it’s crashed all the way down to £20bn, disrupted by external competition and internal mismanagement. Anyone who blindly bought these popular shares in 2005 is likely quite disappointed with the result today.
So to avoid falling into a similar trap, investors need to dig deeper and examine both the risks and potential rewards of investing in today’s favourites. With that in mind, let’s take a closer look at the largest of the bunch – AstraZeneca.
The bull case
As a major pharmaceutical giant, AstraZeneca’s had little trouble selling its products. A global ageing population is ramping up demand for the life-saving medicines found in the firm’s product portfolio. Given that healthcare spending isn’t affected by economic conditions, the stock’s also proven to be remarkably resilient during downcycles.
During the 2020 Covid crash, AstraZeneca shares fell by only around 10% compared to the FTSE 100’s 30% tumble. And it didn’t take long before the firm bounced back from the disruptions, leading to a steady stream of new product launches and a ramp-up of its drug development pipeline. The result of all this is continued double-digit earnings growth, funding R&D efforts, and international expansion.
What could go wrong?
AstraZeneca has a knack for discovering and developing new drugs. However, even with its impressive talent pool, the expensive process of bringing a new product to market can take years, something that AstraZeneca may not have.
Like many pharmaceutical giants in 2025, the company’s facing a patent cliff. Many of its treatments are losing exclusivity rights, allowing generics to come in a steal market share. While that’s great news for patients wanting cheaper and better access, it’s a massive headache for the likes of AstraZeneca.
For example, Farxiga – a cardiovascular drug that generated $7.7bn in 2024 – is starting to lose its patent protection. And other blockbuster drugs from AstraZeneca’s portfolio, like Lynparza (cancer), Symbicort (asthma), Fasenra (asthma), and Brilinta (cardiovascular), are also facing the start of patent expirations between now and 2030.
Needless to say, if the pharma giant doesn’t launch new blockbuster treatments to offset the incoming loss of revenue, its status as the largest company on the London Stock Exchange could come to an end.
That’s why I’m not rushing to buy the shares right now. And investors need to carefully examine the other popular UK shares I’ve mentioned before putting any money to work.
