The seemingly unstoppable rise of Rolls-Royce (LSE: RR.) shares has been checked a tad. After shooting to an all-time high of 1,570p in August, the share price has retreated to 1,322p as of today (21 October).

Is this a sign for Rolls-Royce shareholders to run for the exits? Or perhaps a chance to load up on the shares at a discount rate? Let’s take a look at why the shares have been falling – and what I plan to do about it.

Mood music

So what’s going on here? I see two main reasons the mood music has been shifting. For one, the conflict in the Middle East drags on further. The latest awful attack on a Saudi airport suggests the proceedings in the area are far from over.

How does this affect Rolls-Royce? Well, the company’s biggest division is Civil Aerospace – building and servicing engines for passenger planes. The crucial detail is that fees are calculated by the number of flying hours. If airspace is closed across the Middle East, then this could flatten future earnings. Demand for flights might drop too, partly because of rising fuel costs, partly because travelling and flying is seen as more dangerous.

A second issue is the worries around artificial intelligence. I was struck by the news of a South Korean data centre builder (Elice) losing a third of its value on its first day of trading. Little signals like this suggest the ‘AI stock market crash’ may soon be more than just doomsaying.

Rolls-Royce has been enjoying a flood of orders for its backup power generation for data centres. There has also been serious interest in SMRs (small nuclear power stations) as a power source for AI at some point down the road too. As a result, a worse outlook for AI has an impact on the British firm.

So what’s the verdict then?

Discount?

The recent struggles are, to my mind, fleeting ones. That’s not to say that global conflict or AI nerves could be a problem, nor that they will go away any time soon. But I don’t see them affecting the long-term trajectory of the company.

It could even be a chance to buy in cheaper. The share price is currently trading at a 15% discount from its value in August.

The valuation has fallen along with it. A price-to-earnings ratio of 36 might not look the cheapest out there, but could prove to be good value for a firm with so many growth prospects.

As for my decision? Well, I was lucky enough to spot the opportunity in Rolls-Royce shares back in 2023 when it was near the start of its generational run. The position has now grown to one of the largest in my portfolio, putting me off buying more because I feel I have plenty of exposure already.

For this reason, I have even considered trimming to reduce concentration risk, but for now I’m happy to follow the old investing maxim: ‘let your winners run’. I think the stock is worth considering.

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John Fieldsend owns shares in Rolls-Royce.