Nvidia (NASDAQ: NVDA), Rolls-Royce Holdings (LSE: RR.), and Lloyds Banking Group are three of the most popular stocks in the market. Over the last few years, all three have doubled in price.

The question is: which stock is most likely to double my money first from here? Let’s discuss.

How can a stock double?

Before we look at the three different companies, let’s take a look at how a stock can double in price. There are a number of ways it can happen.

One scenario involves earnings per share (EPS) doubling while the price-to-earnings (P/E) ratio stays the same. Another scenario involves a doubling of the stock’s P/E ratio while EPS remains constant.

A third scenario is a combination of EPS rising and the P/E ratio also rising. This scenario is the most common and if I was looking for stocks that could double my money, I’d be searching for companies where this is a real possibility.

Nvidia

Zooming in on the trio, Nvidia definitely has the potential to see both a significant increase in earnings and a valuation re-rerating, in my view. Its revenues are soaring at the moment thanks to high demand for its AI chips. And its earnings are too – this year and next analysts expect earnings growth of 77% and 44% respectively.

Of course, these estimates assume that AI spending remains strong. It may not.

As for its valuation, I see room for a material re-rating as the forward-looking P/E ratio is only 17. I wouldn’t be surprised to see the P/E ratio rise back to 25 at some point.

It may not though. One challenge for this company is that its market-cap is over $5trn – I feel that a lot of investors are struggling to envisage larger valuations.

Rolls-Royce

Turning to Rolls-Royce, it certainly has earnings growth. This year and next, its earnings per share are expected to jump 44% and 15% respectively on the back of demand for its engine services and defence products. Growth could be even higher as this company has consistently upgraded its guidance of late.

Where things get a little complex however, is the valuation. Currently, the forward-looking P/E ratio here is 31. There’s maybe a little bit of scope for a valuation increase at that earnings multiple. But not a lot.

To my mind, for the stock to double, most of the heavy lifting would have to be done by earnings. We’d probably have to see some big increases to guidance.

Lloyds

As for Lloyds, it’s expected to see decent earnings growth in the years ahead. For this year and next, analysts forecast growth of 46% and 19% respectively.

Its P/E ratio using next year’s forecast is about 9.3. At that multiple, I see scope for a positive re-rating but not a gigantic one – perhaps the P/E could get to 11 or 12.

The stock I’m backing is…

Comparing the three stocks, Nvidia has the most potential when it comes to a possible doubling, in my view. It has the best earnings growth and I see scope for a significant valuation re-rating to boot. So that’s where my money is right now. I think it’s worth a closer look at current levels…

Should you invest £5,000 in Nvidia right now?

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Edward Sheldon owns shares in Nvidia.