This year, top-performing investments such as Tesla and Bitcoin have risen 36% and 67%, respectively. That's well ahead of the S&P 500, which is up a modest 25% year to date. But as good as those investments have been, there are two that have generated stronger returns for their shareholders.
Both Moderna (MRNA 1.55%) and Nvidia (NVDA -1.11%) have doubled and are up more than 125% thus far. And they are probably going to be better buys than both Tesla and Bitcoin in 2022 as well.
Moderna has been one of the greater buys on the market since the start of the pandemic, as its COVID-19 vaccine has played a key role in keeping people safe. And with the pandemic not coming to a close just yet (certainly not with the omicron variant still in its early stages), its stock has remained a hot commodity.
Through the first nine months of the year, the healthcare company's sales of $11.3 billion are 49 times the $232 million that Moderna generated over the same period last year. And that was when it was just accumulating income from grants and collaboration efforts. This year, the company has recorded more than $10.7 billion in product sales -- due to its vaccine.
Entering 2022, with a new COVID-19 variant to worry about and a potential fourth booster shot on the way, demand isn't likely to taper off. In fact, Moderna anticipates more revenue in 2022 than it generated this year (its forecast for 2022 tops out at $22 billion in sales versus $18 billion for 2021).
At a forward price-to-earnings ratio of just 11, Moderna looks like a bargain compared to automaker Tesla, where investors are paying 155 times future profits for its stock. Of course, Tesla is in a different industry, but Moderna's ratio falls just below the S&P 500 Pharmaceuticals forward PE ratio of 13. And it's safer than investing in Bitcoin, which in just the past month has seen its value drop by more than 25% (while Moderna has risen 22%).
Shares of tech stock Nvidia have risen 125% this year. With more companies moving to the cloud and digitizing their operations, the demand for computer chips has been soaring, and there's such a shortage in the industry that it may not be until 2023 that it balances out.
This ensures that chipmaker Nvidia will remain busy for the foreseeable future. On the company's most recent earnings call, Nvidia said that it expects to see continued growth in its data center business, which provides companies with the infrastructure they need to manage their operations in the cloud. CEO Jensen Huang said that "customers are very mindful of securing their supply for their scale out."
Through the first nine months of 2021, the company's sales totaled $19.3 billion and rose 65% year over year. The bulk of its sales (85%) come from its gaming and data center segments. And while gaming has grown at a rapid rate of 72% thus far, the company expects the data center to grow at a faster pace heading into the last quarter of the fiscal year. Nvidia hasn't provided guidance for 2022 yet, but with strong demand and the company working on increasing supply, its business could be in a solid position for next year to continue building on its already impressive numbers.
The stock's forward P/E of 68 relative to the S&P 500 Semiconductors forward PE of 24.2 isn't cheap, but it's still significantly lower than Tesla's. And demand for its products looks to be a safer bet than it will be for electric vehicles, especially with inflation eroding consumer purchasing power away. Nvidia has been a better buy this year than both Tesla and Bitcoin and odds are it will remain that way over the long term.