Nestle, Nvidia, Tesla: buy, hold or sell?
After hiring its third boss in two years, analyst Rodney Hobson reveals what he thinks about goings-on at this European food giant. He also gives a view on two of the most popular US stocks.
3rd September 2025 09:01
by Rodney Hobson from interactive investor
Food group Nestle SA (SIX:NESN) is getting a little careless with its chief executives. Having ousted Mark Sneider a year ago to appoint company veteran Laurent Freixe in an attempt to halt a slide in the share price, Nestle has had to let Freixe go. Not, mercifully, due to misbehaviour of the financial sort but an undisclosed romantic liaison with a direct subordinate that amounted to a breach of Nestle’s strict code of conduct.
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Results under Freixe have admittedly been a bit mixed, with lower revenue and a 10% drop in net profit in the first half of this year, though revenue and profits translated into Swiss francs have been reduced by currency movements.
However, organic sales rose 2.9%, mainly through making price rises stick, and Nestle expects a better second half despite “increased headwinds”.
The shares have been on a long slide from SFr127 at the end of 2021, but they do seem to be bottoming out at SFr75, where the price/earnings (PE) ratio is just under 19 and there is a decent yield of 4%.
Source: interactive investor. Past performance is not a guide to future performance.
Hobson’s choice: Last December I said that the shares were far too cheap at SFr75 and I stick to that view. It will require patience but the buy rating remains in place.
Updates: It was a case of deciding if the pot is half full or half empty when assessing quarterly results from AI leader NVIDIA Corp (NASDAQ:NVDA). See Keith Bowman’s detailed analysis ii view: demand for Nvidia next-gen AI chip is ‘extraordinary’
Earnings once again beat expectations, but some investors fretted that extremely high growth is slowing to very high growth. Data centre sales, the main part of the business, rose a mere 56% and growth is projected to slow to 52%. Margins slipped from 78% to 72%. These figures would be staggeringly good for almost every other company but not for Nvidia, where hyper-expansion is priced into the shares.
It is worth noting that the suspension of shipments to China were to blame for the slowdown. Although China is encouraging its own chipmakers to step up production, Nvidia should resume sales there as the tariff war rhetoric cools down. Demand for Nvidia’s products continue to grow even if competitors are muscling in. The shares slipped after the results but are already picking up again at $170. They remain a buy.
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Meanwhile, shares in electric carmaker Tesla Inc (NASDAQ:TSLA) continue to defy gravity or common sense but at least there is now a clear sign that each recovery runs out of power somewhere between $330 and $350. An American tax incentive in favour of electric cars has ended and, given that Tesla chief Elon Musk is now firmly out of favour with the political establishment, will not be renewed.
This side of the Atlantic, sales continue to slump in Europe. For example, sales in France, a key market, halved in August in a rising market and in Sweden, where electric cars are well received, sales slumped 84% to only 210 vehicles. August figures from two other large markets, the UK and Germany, are due later this week and should make equally sad reading. Yet as recently as July Musk was claiming that “there are no issues with Tesla volumes on the European market”.
Word on Wall Street is that analysts are steadily lowering their forecasts for earnings, and Musk has tacitly acknowledged that his dream of dominating electric car sales has hit a roadblock by switching to AI and robotics, where he is playing catch-up rather than leading.
Tesla has serious problems. Those searching for solid long-term gains should look elsewhere. Investors seeking quick profits should sell anywhere above $330 and think about buying only below $280. Either way, at current share price levels Tesla is a sell.
Rodney Hobson is a freelance contributor and not a direct employee of interactive investor.
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