Buy Hold Sell: 5 global tech leaders (and 2 more you simply can't ignore)

Tech companies have carved out a special place in the zeitgeist. Like Sting and Madonna, they often go by singular names and, in many cases, those names have become verbs.

We don’t search online, we Google. We don’t request a ride, we Uber. Often, when companies reach such a status, there is a coalescence between their use in parlance, our use of their products in everyday life, and a sky-high share price.

The question we, as investors, must seek to ask and answer, however, only concerns the latter. Is the business priced appropriately for the expected future return? That’s not so easy to do when the whole world is in love with a company, and its products are so widely used.

But that’s what fund managers signed up for, and so that’s the question, amongst others, that we’re exploring in this episode of Buy, Hold, Sell, where Livewire’s James Marlay was joined by Vihari Ross from Antipodes, and James Tsinidis from Munro Partners. 

For good measure, Ross and Tsinidis each share a tech stock they think is so compelling you can't ignore it. 

Note: This episode was recorded on Wednesday, 26 February 2025. You can watch the video, listen to the podcast or read an edited transcript below.

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Edited Transcript

James Marlay: Hi there, ladies and gentlemen, and welcome to this episode of Buy Hold Sell. My name is James Marlay, and today we're going global to talk about some of the biggest tech stocks on the planet. Joining me to talk about these companies, I've got Vihari Ross from Antipodes and James Tsinidis from Munro Partners. Thanks both for joining me.

Nvidia (NASDAQ: NVDA)

All right. James, I'm going to start with you. It's been this tear away stock, the star of the tech scene, Nvidia. Buy, hold, or a sell?

James Tsinidis (BUY): Yeah, still a buy, even after all these years. You can still buy it at 30 times earnings, which is what you bought it for five, six years ago. So it's in line with its historical averages in terms of price to earnings (PE) multiple. All the growth in the share price has been driven by all the growth in earnings. Earnings will continue to grow because AI is proliferating, and it's your one-stop shop for AI. So think about how big this could be if AI goes into every industry in the world and they sell their chips into every industry in the world.

James Marlay: Okay. It's now the second-largest company on the exchange. Buy, hold, or a sell on Nvidia?

Vihari Ross (SELL): I'm going to say sell, because I don't like to sit on the fence here. I think this is a business that is clearly exceptional, clearly is a leader in this new technology cycle of AI. It is trading on a PE basis in line, as James has pointed out, but it is trading on an 18 times sales multiple, and that's because of that profitability, monopoly-type rents it's extracting is really high, an 80% gross margin.

What we're seeing here, though, is not so much that. It's that range of outcomes risk around this CapEx cycle and how that is going to shift. It's in the hands of these mega tech companies and how much are they going to continue to spend? And that's going to be linked to their ability to monetize. And the other element is competition. They aren't necessarily going to stay. They are going to certainly be a participant and be a leader in many ways, but there will be other competing products coming, including those designed by their own customers themselves.

Tesla (NASDAQ: TSLA)

James Marlay: Brave person to put a sell on Nvidia. It's been the star stock over the past few years. Let's change tack. We're going to talk about Tesla. Tech company, car company, buy, hold, or a sell?

Vihari Ross (SELL): This is a sell. This is a business that has completely untethered from fundamentals. They've had 22% earnings downgrades in the last 12 months. Obviously the share price continues to go up, but you have a lot of headwinds. They're losing market share, there is competitive threats, it has been a bloodbath in China. Their pricing is coming down, their margins are under pressure. The politicisation of Elon Musk has actually been bad for sales also, in recent data. So this is a business that ultimately cannot sustain the multiples it's on at the moment and is most certainly a sell.

James Marlay: Vihari's outlined the bear case. It has been a bit of a troublesome stock for short sellers over the years. Buy, hold, or a sell?

James Tsinidis (SELL): Yeah, unfortunately we're going to have to say sell as well. Great company, obviously developed the EV industry, but to Vihari's point, it's just too competitive in that core market. So prices are coming down, margins are coming down, profits are coming down. So the analysts are cutting their numbers, as Vihari outlined. Obviously the stock doesn't trade on that. It trades on other things like self-driving, which admittedly, glass half full, is starting to work. You can see autonomous cars in the US already, if you've travelled there recently. And then robotics as well. So people are obviously pricing in this grand vision for a robot in your house helping fold your laundry and so forth, and you're going to pay 20 grand for that.

James Marlay: I'll take two.

James Tsinidis: Yeah, exactly. It'd be great, but yeah, it's just too far off into the future and numbers in the immediate term are coming down.

Apple (NYSE: AAPL)

James Marlay: Okay. Let's go to the big kahuna, Apple. It reported just recently, announced a $500 billion investment in AI. Buy, hold, or a sell?

James Tsinidis (SELL): Going to have to say sell on this one. The stock is probably too expensive for its growth rate. So, 30 times PE. For a single-digit grower, it screens as quite expensive relative to other tech companies and relative to the market. iPhone's obviously not growing after all these years. Services is growing, but the take rate on services is really high. So it's a bit egregious. For us, it doesn't have the growth, it has the high multiple, so it's probably expensive defensive. So yeah, sell.

James Marlay: Okay. James is selling. Warren Buffett's selling. Buy, hold, or a sell for you?

Vihari Ross (SELL): Yeah, look, I agree with those guys. They seem to know what they're talking about here. I think it's certainly a sell. As James pointed out, iPhone sales haven't grown for a decade. It used to be all about people coming into the ecosystem and then extracting a rent out of those locked-in users, and now it's about the replacement cycle. Maybe AI will shift that slightly in the short-term, but it certainly doesn't change the long-term fundamentals of a stock that's at 32 times and growing at only 5%.

The other thing I think is worth pointing out here, and it's a function of the broader market in the US, there is no pricing in of the geopolitical risk between the US and China in large-cap American stocks like Apple. And I'm talking about their supply chain links into China, but also their sales base in China as well. And that's another example of where there is some mispricing in US versus ex-US stocks.

Amazon (NASDAQ: AMZN)

James Marlay: We're going to stay with the F-A-N-G’s. Let's go to Amazon. It started off as selling books online, now it's one of the global tech behemoths. Buy, hold, or a sell?

Vihari Ross (BUY): This is a buy. It has been a laggard as well. I think it's a business that continues to benefit from the transition to the cloud, inflexion in profitability in retail after a period of investment, and augmentation to their revenue base from things like subscriptions, and from advertising as well. Again, trading at a discount to its history and with a continued robust growth profile.

James Marlay: Reasonably priced, a bit of growth for Vihari. Buy, hold, or sell on Amazon for you?

James Tsinidis (BUY): Also buy on Amazon. Just mathematically, the earnings are depressed on the retail business. So as Vihari said, when margins do go up, it's going to have a very big effect on earnings. Obviously today, all the earnings are coming from advertising and from the cloud. So when that retail does start to become profitable, it'll become a big, big driver of their earnings growth. So it's still buy.

James Marlay: Okay. Last stock for today. Alphabet, parent company for Google, which is probably what people would be most familiar with. Buy, hold or a sell?

Alphabet (NASDAQ: GOOGL)

James Tsinidis (BUY): Yeah, buy. The stock's just really cheap. It's actually trading at a discount to the S&P 500. So it's on 17 times, market's on 22 times. So big relative valuation there for Google. Google Search is still growing. YouTube and cloud are obviously profitable. And then you've got unpriced optionality to the upside in things like Waymo, self-driving cars and so forth. So lots in there to like, and at a very reasonable multiple.

James Marlay: There are a few concerns about the emergence of AI is disruptive for Google. Vihari, buy, hold, or a sell for you?

Vihari Ross (BUY): I'm a buy as well. This misplaced fear is probably why the stock is trading at a really compelling valuation. As James pointed out, it is trading at a discount to the S&P, growing faster than the S&P, are still at that mid-teens growth rate per annum. And what we're seeing is that the evidence is simply refuting those fears, so far. You've got people using the AI-driven search actually spending more time searching, asking multiple queries. And so there's no evidence that that is actually disrupting their core search business. It's potentially making it stronger and better. And their own investment in TPUs and in their own AI models are proving to augment the story. So there's a lot to like there.

Guest picks

James Marlay: I've asked our guests to bring along a tech stock they think you simply can't ignore, outside the big names we covered already. Vihari, what's your pick? What's the one tech stock people can't ignore?

TSMC (NYSE: TSM)

Vihari Ross: You can't ignore TSMC. So this is a business that Nvidia relies on, AMD relies on. All the big tech companies need them to produce those leading-edge chips in which they have a clear technology advantage. It's a stock that's moved from being historically quite a cyclical business to being now a structural grower. It's going to be growing at 20% per annum over the next five years. Within that, the AI revenue base is growing at 45% per annum. Their competitive advantages conferred them with pricing power, and it's trading at a very heavily discounted multiple compared to those customers of theirs at 18 times.

James Marlay: James, same question for you. What's the tech stock that people just simply can't ignore?

Netflix (NASDAQ: NFLX)

James Tsinidis: We still like Netflix. It's obviously had a good run, but the network effects are kicking in. So they've got a 300 million viewer subscription base, which allows them to buy content to push through that subscription base. So good examples are the Mike Tyson and Jake Paul fight, obviously the NFL on Christmas Day. They're basically pushing that out to their global audience, getting more reach, which brings in more subscribers, which allows them to basically buy more content to get more subscribers. So it's a virtuous cycle. So the network effects are well and truly entrenched there, but they're by far the number one. So we still really like Netflix.

James Marlay: Well, with these big global names, you can often feel like you've missed the opportunity. But our guests say there's still plenty to like about the biggest tech companies in the world today. I hope you enjoyed that episode of Buy Hold Sell. Remember, check out the YouTube channel. We've got fresh content dropping every week.