Meet the ‘Nvidia of the FTSE 100’

For years, some UK buyers lamented the lack of an Nvidia (NASDAQ:NVDA) in the FTSE 100. They didn’t yearn for a clone of the AI chipmaker essentially, extra a inventory that goes up by a mind-boggling quantity in a brief area of time.

Nvidia actually did that, surging round 1,000% in the three years following the launch of ChatGPT in late 2022. The chatbot kicked off the complete AI revolution, which Nvidia’s chips are nonetheless powering in the present day.

But the FTSE 100 has one. It’s Rolls-Royce (LSE:RR), the extraordinary engine maker whose shares have exploded 1,120% larger in a little bit over three years. Imagine it or not, that’s really higher than Nvidia’s 700% acquire over this era.

Skyrocketing income

Now, these are clearly very totally different companies — one makes jet engines and the different AI chips. However Rolls-Royce’s monetary numbers have, in their very own manner, been simply as spectacular as Nvidia’s.

In 2025, underlying working revenue reached nearly £3.5bn, up from £1.6bn in 2023. A greater than doubling then, with the working margin increasing from 10.3% to 17.3%.

Likewise, Nvidia’s income have soared — they’ve greater than quadrupled on this time!

One other commonality is that each corporations have mastered the artwork of the ‘beat and lift’. In different phrases, they constantly report earnings that exceed analyst expectations, after which elevate their future steerage.

For instance, the medium-term targets that Rolls-Royce set for itself in late 2023 have already been reached, two years early. In the meantime, Nvidia nonetheless manages to maintain pulling off an earnings beat quarter after quarter, regardless of being most likely the most tracked firm on Wall Road.

Nonetheless, as Chris Beauchamp, chief market analyst at IG, factors out: “Rolls-Royce has managed to do what Nvidia couldn’t – engineer a share worth bounce following outcomes.”

He was referring to the share worth efficiency yesterday (26 February), when Rolls inventory jumped 5.1% whereas Nvidia dipped 5.5%. This regardless of the chipmaker posting This autumn income of $68.1bn, a 73% year-on-year improve. 

Beauchamp added: “It seems like the FTSE 100’s model of Nvidia will hold delivering for buyers, because it responds to renewed demand for defence spending throughout Europe and a contemporary ramp up in US [spending] on the manner too”. 

Information centre buildout

There’s a remaining manner wherein Rolls-Royce is emulating Nvidia — knowledge centre development. Whereas the latter packs them out with its AI processors, the FTSE 100 firm is quietly cashing in from the AI energy buildout.

You see, its Energy Methods division provides huge back-up engines required to maintain power-hungry AI servers operating 24/7. In 2025, knowledge centres helped drive 19% income development on this unit, together with 30% development in energy technology.

Nvidia fatigue

Nvidia’s share worth has gone nowhere since August, suggesting a level of Nvidia fatigue. The AI revolution’s making buyers jittery, and a slowdown in spending by cloud giants in some unspecified time in the future is a key threat.

Is the similar destiny ready for Rolls-Royce? In all probability in some unspecified time in the future, particularly if the beat-and-raises reasonable and begin scaling down. The inventory may be very dear now, buying and selling at round 40 occasions this yr’s forecast earnings.

Against this, Nvidia’s going for twenty-four occasions forecast earnings. A major low cost to Rolls-Royce.

After all, there’s nothing stopping long-term buyers contemplating each shares. However proper now, my decide is Nvidia.