NVIDIA Corporation (NVDA)vs SHOP Holdings, Inc. (SHOP)

Quick verdict

NVIDIA Corporation (NVDA) and SHOP Holdings, Inc. (SHOP) appeal to different investors. On our six-factor framework, NVDA scores 6 and SHOP scores 0. NVDA looks cheaper on the multiples that matter, while NVDA grows faster and NVDA earns higher returns on capital. Overall, NVDA edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

NVIDIA Corporation operates in Semiconductors (Technology), while SHOP Holdings, Inc. sits in Beverages (Consumer Defensive). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. NVDA carries a beta of 1.28 versus 0.64 for SHOP, meaning NVDA has historically been the more volatile of the two.

Valuation

On valuation, NVDA is the cheaper stock. NVDA trades on a forward P/E of 10.38 and EV/EBITDA of 24.59, against 16.83 and 10.2 for SHOP. Price-to-sales is 18.21 vs 3.26, and free-cash-flow yield is 4.3% vs 2.0%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

NVDA is the faster grower. NVDA has compounded revenue at 25.5% over three years with EPS growth of 38.2%, while SHOP has delivered 4.0% revenue and 3.5% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, NVDA is stronger. NVDA posts a 42.9% operating margin, 27.0% return on equity and 20.4% return on invested capital. SHOP posts 15.5%, 47.7% and 8.3% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

NVDA has the safer balance sheet. NVDA carries net-debt/EBITDA of -0.17x with a current ratio of 2.18, versus 0.69x and 3.24 for SHOP. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year NVDA returned 75.1% against 42.9% for SHOP; on a three-year annualised basis it is 3.0% vs 16.6%. NVDA yields 2.8% and SHOP yields 1.4%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, NVDA is the better fit on today's multiples. Growth investors will likely prefer NVDA, which is expanding faster. Income investors should lean toward NVDA for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour NVDA for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: NVDA
• Growth: NVDA
• Income: NVDA
• Quality: NVDA

Frequently asked questions

Is NVDA or SHOP the better buy right now?

Neither is universally "better." NVDA scores 6 and SHOP scores 0 on our six-factor framework. NVDA is cheaper, NVDA grows faster, and NVDA is higher quality — so the right pick depends on your objective.

Which stock is cheaper, NVDA or SHOP?

NVDA is the cheaper stock across forward P/E (10.38 vs 16.83), EV/EBITDA (24.59 vs 10.2) and price-to-sales (18.21 vs 3.26).

Which has grown faster, NVDA or SHOP?

NVDA has the stronger growth profile, with three-year revenue CAGR of 25.5% for NVDA versus 4.0% for SHOP.

Which stock pays a bigger dividend?

NVDA yields 2.8% and SHOP yields 1.4%, so NVDA is the stronger income choice.

Related comparisons

• AAPL vs NVDA
• AAPL vs SHOP
• AMD vs SHOP
• MSFT vs SHOP
• NVDA vs AMD
• NVDA vs AVGO