Everybody knows about the Nvidia (LSE: NVDA) share price. It’s been the most thrilling story on the S&P 500 over the past five years, soaring an incredible 1,240%. That would have turned a £10,000 investment into £134,000.
Nvidia sits at the heart of the tech and AI revolution, designing the chips that power everything from data centres and autonomous cars to video games and virtual reality. It didn’t become the world’s biggest company, with a $4.4trn valuation, by accident.
S&P500 index star
Nvidia shares have risen another 30% in the past year, so the growth is inevitably slowing. Hardly surprising, given the price-to-earnings ratio now stands above 50.
Some say an AI bubble is forming, although I suspect we’ve still got further to go before that bursts. Analysts still expect Nvidia to climb another 22% over the next yar to around $223, but given recent successes, that’s a modest return.
I hold Nvidia in my Self-Invested Personal Pension (SIPP), but think investors should tread carefully today. There may be better opportunities closer to home on the FTSE 100, including this one.
Entain shares are tipped to win big
Brokers have a good feeling about international sports betting and gaming group Entain (LSE: ENT). Consensus forecasts suggest its shares are set to rise 43% over the next 12 months, to hit a target price of 1,171p. That’s twice as fast as the Nvidia projection.
Given Entain’s modest £5bn market cap, it has far more room for growth than at the trillion-dollar end of the market.
I spotted Entain’s potential in May 2024, after it had taken a bit of a beating. Botched acquisitions, a £585m bribery scandal in Turkey and disappointing early returns from its 50:50 US joint venture BetMGM had taken their toll.
Starting from a low base, I felt it had plenty of room to recover. But I also warned it was risky, with constant regulatory threats, an investigation for possible money-laundering issues in Australia, and US tariffs.
Entain posted a £461m after-tax loss for 2024, despite £5bn in gaming revenues.
Yet its 2025 Q3 update on 15 October showed progress, with Entain on track to hit full-year 2025 guidance. Total net gaming revenues rose 6% year on year, with 7% growth at constant currency.
CEO Stella David said the transformation “continues at pace”, with BetMGM expected to generate over £500m in annual cash by 2028.
High potential, high stakes
Yet the Entain share price has yet to take off, rising a modest 13% in the last 12 months. Despite that, the stock is expensive, with a price-to-earnings ratio of almost 27.
Many will be concerned about reports that the UK government may increase gambling taxes in its Budget on November 26, which might dent domestic profits. This is a diversified international operator, which should help offset the hit.
I’m still a little baffled about why brokers are so upbeat. I think Entain has serious potential and one bumper set of results could send it flying. The stakes are too high for me and I’m not really a big fan of betting anyway. More aggressive growth-focused investors may find this stock well worth considering, but I think others on the FTSE 100 have almost as much as potential, and with less volatility. As ever, stock picking is a personal thing.
