Rolls-Royce vs Nvidia: which is the best growth stock for Britons to consider buying for 2026 and beyond?
Rolls-Royce (LSE: RR.) and Nvidia (NASDAQ: NVDA) have probably been the two most popular growth stocks in the UK this year. Both have performed really well â the former has nearly doubled in price, while the latter is up about 45%.
But which one is the better stock to consider buying for 2026 and beyond? Letâs put them side by side and see which has more potential right now.
Growth drivers
The first thing I want to do is take a big picture approach and compare their operations. This will give us more insight into their growth potential.
Today, Rolls-Royce operates in several areas including civil aerospace, defence, power systems, and nuclear energy. So, thereâs plenty of growth potential here.
Personally, I think the companyâs exposure to nuclear energy could be a major growth driver for the company. Rolls-Royce has significant expertise in small modular reactors (SMRs) and the market for these is expected to grow tenfold by 2033.
Turning to Nvidia, it has a more narrow business model at first glance, because it simply designs high-powered computing hardware and the associated software.
However, in the years ahead, Nvidiaâs hardware is likely to be used in a range of high-growth industries including data centres (for AI), robotics and humanoid robots, and autonomous driving. Itâs worth noting that the market for humanoids is expected to boom in the years ahead â analysts at Citi Global Insights believe it could be worth $7trn by 2050.
The financials
Moving on to the financials, Iâve put some key stats for each company in the table below. Some are forward looking and some are backward looking.
| Rolls-Royce | Nvidia | |
| 5-year total revenue growth | 16% | 1,095% |
| Forecast revenue growth this financial year | 11% | 58% |
| Forecast revenue growth next financial year | 10% | 34% |
| Forecast earnings growth this financial year | 41% | 52% |
| Forecast earnings growth next financial year | 14% | 42% |
| Return on capital employed last year | 15.4% | 87.1% |
Looking at the table, we can see that Nvidia is growing at a much faster pace than Rolls-Royce. Itâs also far more profitable, and growing its earnings at a faster clip.
Valuations
In terms of valuation, Rolls-Royce currently has a price-to-earnings (P/E) ratio of 40, falling to 35 using next yearâs earnings forecast. By contrast, Nvidia has a P/E ratio of 43, falling to 30.
Zooming in on the price-to-earnings-to-growth (PEG) ratio, Rolls-Royce is on 1.02 while Nvidia is on 0.83. So, Nvidia is cheaper relative to earnings growth.
Share price targets
Looking at analyst price targets, the average for Rolls-Royce is 1,119p. Thatâs about 2% below the current share price.
For Nvidia, itâs $216. Thatâs about 12% above the current share price.
Risks
Finally, thinking about risks, both companies face them.
For Rolls-Royce, I think the big risks are a slowdown in civil aviation, product reliability issues, and higher costs/supply chain issues.
For Nvidia, the biggest ones are probably a slowdown in AI spending, new products from rivals such as Broadcom and AMD, and China issues.
My pick
Putting this all together, I reckon Nvidia is the better stock of the two, taking a minimum one-year view. Not only is it cheaper but itâs growing faster and is much more profitable.
Having said that, itâs not a stock Iâd rush out to buy today given its move higher this year. In my view, there are better growth stocks in the market right now.
The post Rolls-Royce vs Nvidia: which is the best growth stock for Britons to consider buying for 2026 and beyond? appeared first on The Motley Fool UK.
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Edward Sheldon has positions in Nvidia. The Motley Fool UK has recommended Advanced Micro Devices, Nvidia, and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
