"Investing $10,000, 'NVIDIA (NVDA)' over SpaceX (SPCX)"...Why?

▲ SpaceX (SPCX), NVIDIA (NVDA)/AI-generated image ©

An analysis has emerged suggesting that if one were to invest $10,000 in a single stock right now, NVIDIA (NVIDIA, NVDA) would be chosen over SpaceX (SpaceX, SPCX). This judgment is based on the premise that SpaceX's stock price relative to its revenue is excessively high, while NVIDIA possesses both dominance in the AI semiconductor market and a lowered earnings multiple.

According to Nasdaq on July 9 (local time), Motley Fool contributor Anthony Di Pizio stated that he would consider NVIDIA instead of SpaceX if investing $10,000 in a single stock within a diversified investment portfolio. SpaceX began trading at $150 per share on June 12 and rose to an all-time high of $225.64, but its price-to-sales ratio, based on a market capitalization of $2 trillion and recent 12-month revenue of $19.3 billion, stands at 103x. This is 16 times higher than the Nasdaq-100 average.

The key reason Di Pizio chose NVIDIA is its next-generation AI computing platform, Vera Rubin. NVIDIA is commencing full-scale production of Vera Rubin and plans to begin shipping commercial quantities within several months. NVIDIA stated that Vera Rubin can reduce the GPUs required for AI model training by 75% and lower inference token costs by up to 90% compared to Blackwell processors. NVIDIA CEO Jensen Huang said, "Every cutting-edge model company plans to adopt Vera Rubin upon its release."

Performance growth also supported the investment decision. NVIDIA recorded $81.6 billion in revenue in the first quarter of fiscal year 2027, which ended on April 26, an 85% increase year-over-year, with data center revenue growing by 92% to $75.2 billion. Analysts project revenue of $392 billion for fiscal year 2027 and $554 billion for fiscal year 2028.

The risk of AI investment enthusiasm cooling down was also raised. The cost of building data centers has surged due to shortages of GPUs and high-bandwidth memory, and a UBS Group survey showed that 60% of companies chose lower-cost AI models that use fewer computing resources. While there is a possibility of AI semiconductor demand slowing, Di Pizio evaluated NVIDIA's earnings multiple as being at a level worth taking the risk.

NVIDIA's price-to-earnings (P/E) ratio is 30.2x, which is half of its 10-year average of 61.6x and also lower than the Nasdaq-100's 35.2x. Applying Wall Street's projected earnings per share of $12.76 for fiscal year 2028, the forward P/E ratio is 15.4x. Di Pizio explained that if these performance forecasts are accurate, NVIDIA's stock price would need to double over the next 18 months to maintain its current earnings multiple, and quadruple to reach its 10-year average earnings multiple.

[Article Key Summary]

-Anthony Di Pizio stated that if he were to invest $10,000 in a single stock, he would choose NVIDIA over SpaceX.

-SpaceX's price-to-sales ratio is 103x, 16 times higher than the Nasdaq-100 average, while NVIDIA's price-to-earnings ratio is half of its 10-year average.

-NVIDIA stated that with Vera Rubin, it can reduce GPUs for AI model training by 75% and lower inference token costs by up to 90%.

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