Prediction: this growth stock will outperform Nvidia, Tesla, and Rigetti over the next 2 years
Nvidia, Tesla, and Rigetti Computing are probably the three most popular growth stocks within the UK investor community right now. All are flying at present and may continue to do well in the near term.
However, taking a two-year view, I see more potential in other growth stocks. Hereâs a look at one I believe can potentially outperform those three aforementioned names over the next two years.
A stock for the next phase of AI
The company I want to zoom in on is Snowflake (NYSE: SNOW). Itâs a US-listed technology company that helps organisations apply artificial intelligence (AI) solutions to their data.
The platform’s key selling point, the AI Data Cloud, is that companies can bring together all of their data onto it, eliminating silos. They can then easily run AI models (like ChatGPT or DeepSeek) on the data without moving it out of the secure platform boundary (a big plus for large enterprises who are concerned about data security and privacy).
Itâs worth noting that this week, Snowflake announced a partnership with AI powerhouse Palantir. This could make its offer even more powerful.
âThousands of customers are betting their business on Snowflake and more than 6,100 accounts are using Snowflakeâs AI every week. We have an enormous opportunity ahead as we continue to empower every enterprise to achieve its full potential through data and AI.â
Snowflake CEO Sridhar Ramaswamy
Snowflake versus the others
So why do I think this stock can outperform Nvidia, Tesla, and Rigetti over the next two years? Well, it comes down to growth, valuations, and market-cap.
In the table below, Iâve put some key growth and valuation metrics for the four stocks.
| Snowflake | Nvidia | Tesla | Rigetti | |
| Projected sales next year | $5.7bn | $277bn | $109bn | $22m |
| Projected sales growth | 24% | 34% | 16% | 165% |
| Projected earnings growth | 37% | 43% | 34% | N/A |
| Market-cap | $81bn | $4.4trn | $1.4trn | $16bn |
| Price-to-sales ratio | 14.2 | 15.9 | 12.8 | 727 |
Now, looking at those figures, itâs not like Snowflake’s the hands down winner in every category. However, comparing it to the other three names, it wins in several key categories against each stock.
For example, compared to Nvidia, it has a lower price-to-sales ratio and a much lower market-cap (Nvidia’s the largest company in the world today). This leads me to think it could attract investors looking for smaller, up-and-coming AI players (ie the next Nvidia).
Compared to Tesla, itâs forecast to have much higher top-line growth next year as well as more earnings growth. Itâs also considerably smaller than the electric vehicle (EV) maker.
Finally, compared to Rigetti, it has a much lower valuation (Rigettiâs valuation is in âbubbleâ territory in my view). And unlike the quantum computing company, Snowflake has both earnings and earnings growth, which could attract institutional investors.
Worth a closer look
Now, my prediction could turn out to be horribly wrong, of course. Growth stocks can do crazy things at times and we could see Nvidia, Tesla, or Rigetti shoot up and leave Snowflake for dead.
A lot will depend on Snowflake’s top-and bottom-line growth. If growth stalls due to less spending on data and AI, the stock could deliver disappointing returns.
Recent earnings from the data company have been very encouraging though with product revenue growth accelerating to 32% in the last quarter (which makes me think it could exceed 24% growth next year). So Iâm optimistic about the stockâs trajectory.
In my view, this is a stock that long-term growth investors should consider buying.
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Edward Sheldon has positions in Snowflake and Nvidia. The Motley Fool UK has recommended Nvidia, Snowflake, and Tesla. 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.
