MW Nvidia's on a new path, and if you own an S&P 500 index fund your money is riding on it
By Philip van Doorn
Also in Weekend Reads: reactions to the SpaceX IPO filing, how to make a Roth IRA conversion mistake and accurate advice from the Moneyist
Nvidia CEO Jensen Huang introduced the Rubin GPU and the Vera CPU in January ahead of the Consumer Electronics Show in Las Vegas.
So far this year, Nvidia's stock has risen 18%. But the stock's forward price/earnings ratio has declined to 21.4 from 24.5 at the end of last year, because analysts' rolling consensus 12-month earnings-per-share estimates have risen even more quickly.
Nvidia (NVDA) is now the largest company in the S&P 500 SPX, with a market capitalization of $5.31 trillion, according to FactSet. So the stock makes up 8.35% of the State Street SPDR S&P 500 ETF Trust SPY. If you are an index-fund investor, you have a relatively large amount of money invested in Nvidia.
For its fiscal year ended Jan. 25, Nvidia reported total revenue of $215.94 billion, up 65% from the previous fiscal year. So investors might have expected the company's sales-growth rate to decline, which could have helped keep Nvidia's forward P/E at a relatively modest 21.4 when compared with weighed P/E of 21.1 for the S&P 500 and 24.3 for the S&P 500 information-technology sector, according to LSEG's data.
But on Wednesday, Nvidia announced results for the first quarter of its fiscal 2027, which included revenue of $81.6 billion, up 85% from the year-earlier quarter.
Britney Nguyen explained how that sales-growth acceleration was partly driven by Nvidia CEO Jensen Huang's push to move the company beyond its dominance of the graphics processing units being used in data centers into another area of hardware to support AI.
Nvidia also reported spending $18.6 billion on venture investments during its most recent quarter. Christine Ji followed the Nvidia money trail.
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Big Tech's run-up
Here are the 15 stocks in the S&P 500 that had gained the most in May through Thursday. The price changes exclude dividends.
Company May price change Price change since end of March 2026 price change 2025 price change Datadog 64.9% 85% 60% -5% Fortinet 53.6% 58% 63% -16% Micron Technology 47.4% 126% 167% 239% CrowdStrike Holdings 45.4% 66% 38% 37% Akamai Technologies 42.0% 27% 68% -9% Palo Alto Networks 41.0% 58% 37% 1% Sandisk 40.6% 143% 550% N/A Cisco Systems 29.2% 52% 53% 30% Gen Digital 28.8% 32% -9% -1% Humana 28.4% 75% 19% 1% DaVita 28.1% 29% 75% -24% Advanced Micro Devices 26.8% 121% 110% 77% Intel 25.4% 169% 221% 84% First Solar 23.3% 26% -5% 48% Super Micro Computer 22.1% 47% 14% -4% Source: LSEG
All of these companies are in the information-technology sector, except for Humana $(HUM)$ and DaVita $(DVA)$, which are in the healthcare sector.
There is no 2025 price change for Sandisk $(SNDK)$, which was spun off from Western Digital $(WDC)$ in February of last year.
Here is a sampling of coverage from the MarketWatch technology team:
-- Micron's stock gets a boost. Are Samsung's problems helping?
-- Palo Alto Networks hits a big milestone. Why cybersecurity stocks are so hot right now.
-- Quantum stocks soar as the Trump administration looks to be buying in
-- Arm's stock could rise another 45% as the 'renaissance of CPUs' takes hold, analyst says
Christine Idzelis explained how a small number of stocks showed incredible gains since the end of April, even as most stock prices declined.
A screen: These 15 S&P 500 stocks could be contrarian ways to play the market's uneven rally
Thoughts on the SpaceX IPO
Space Exploration Technologies, known as SpaceX, filed for an initial public offering on May 20.
In its S-1 filing with the Securities and Exchange Commission on Wednesday, SpaceX - the full name of the company is Space Exploration Technologies - reported total revenue of $4.694 billion for the first quarter of 2026 with a quarterly net loss from operations of $1.943 billion. During 2025 revenue totaled $18.674 billion, with an operating loss of $2.589 billion for the year.
SpaceX also described what it called the "the largest actionable total addressable market" in human history, totaling $28.5 trillion, in the first paragraph on Page 11 of the filing.
The company and its investment bankers haven't put a price on the IPO. But the Wall Street Journal reported that SpaceX was valued at $1.25 trillion in February when it was merged with xAI. Some analysts expect the IPO to be priced such that the entire company would be valued at $1.5 trillion.
Based only on the revenue number for the first quarter of 2026, annualized, a $1.5 trillion valuation for SpaceX would make for a trailing price/sales ratio of 79.9. That is a high number, and we can add some perspective using data provided by FactSet:
-- The S&P 500 trailing price/sales ratio is 3.5.
-- Tesla's TSLA trailing P/S is 15.1, and it peaked at 34.6 in February 2021. Tesla went public in June 2010. FactSet earliest available trailing price/sales ratio for Tesla was 13.2 in July 2010.
-- Palantir's PLTR trailing P/S is 67.5, and it peaked at 154.3 in November 2025. Palantir went public in September 2020, and FactSet's earliest trailing price/sales ratio for the company was 19.4 in November 2020.
So an initial trailing price/sales ratio of 80 may not look so high a few years from now if SpaceX CEO Elon Musk is correct in his expectations for the company's addressable market. After all, the company already dominates the global space-launch industry. According to the American Enterprise Institute, SpaceX "conducted 52 percent of all launches, launched 84 percent of all satellites, and delivered 84 percent of total satellite mass to orbit" during 2024. You can read that report here.
Here is MarketWatch coverage of the SpaceX IPO filing and reaction:
-- Investors are flocking to an offshore crypto platform for an early shot at trading the SpaceX IPO
-- Elon Musk's xAI is draining SpaceX's cash, with little to show for it
-- SpaceX has a lot riding on its imminent Starship rocket launch
-- OpenAI could steal SpaceX IPO's thunder
The latest challenge to the bull market
Over the past 10 years through Thursday, the S&P 500's average annual return, with dividends reinvested, has been 15.7%, according to data supplied by LSEG. For the previous 10-year period, the S&P 500's average annual return was 7.2%. One reason the stock market has performed so much better in recent years is that investors weren't being temped by yields in the bond market, which have been lousy.
But now, the yield on 20-year U.S. Treasury bonds BX:TMUBMUSD20Y is higher than 5%, and 10-year Treasury notes BX:TMUBMUSD10Y yield 4.55%. Joseph Adinolfi and Joy Wiltermuth described the bond-market selloff and how it might affect the stock market.
Here's an easy way to ease your suffering when flying this summer
Don't Short Yourself - MarketWatch's new weekly newsletter - offers smart tips to help you earn and grow your money.
In this week's Don't Short Yourself newsletter, Genna Contino shared a simple tip on how to get better prices on airline tickets.
More from Genna Contino:
-- Is your college grad moving back home? How to help them build savings - and protect your retirement.
-- 'How much money do you make?' Since you can't ask your date that, ask this instead.
Don't be too hasty when deciding on a Roth IRA conversion
A traditional IRA or employer-sponsored retirement account, such as a 401(k), is tax-deferred. This means money you contribute during a year is deducted from your taxable income. Any interest, dividends or capital gains within the account are also tax-deferred, and your money will grow this way until you eventually begin withdrawals, which will be taxed as regular income.
A Roth retirement account is funded with after-tax money. That means you cannot deduct your contributions from your taxable income, but that's it. The money and any interest, dividends or capital gains will not be taxed while you are alive, and if a loved one inherits the account, their tax consequences will be limited.
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May 22, 2026 13:40 ET (17:40 GMT)
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