Few shares in the history of the UK market have achieved such growth Rolls-Royce (LSE:RR.) shares.

From the darkest days of the pandemic FTSE100 engineer has climbed almost 1400% and is at around 1400p today. This is the kind of turnaround that creates generational wealth.

But it also raises an uncomfortable question: Have supplies already run out? Or maybe this is still just the beginning?

The Bull Case: Two Huge Catalysts for Growth

Even with the impressive share price rise, the most exhilarating chapter in Rolls-Royce’s history may not have been written yet.

The next major growth opportunity is nuclear energy. Rolls-Royce’s compact modular reactors (SMRs) received formal approval from the UK government earlier this year to justify the apply of nuclear power and secured a £599m loan from the National Wealth Fund to start work at the Wylfa plant in Anglesey. It also signed an early work agreement with CEZ Group for the supply of electricity with a capacity of up to 3 GW in the Czech Republic.

This means that Rolls-Royce is currently the only company in the world with multiple contractual obligations to supply SMR vehicles across Europe. This gives it a real first-mover advantage in a market that could ultimately be worth hundreds of billions.

At the same time, the company’s UltraFan engine program is also making impressive progress. With more tests planned for the rest of 2026, the project is progressing steadily. And with many airlines looking to modernize their fleets to improve fuel efficiency, Rolls-Royce appears to be well-positioned to take advantage of this accelerating tailwind.

With this in mind, it’s not surprising that some institutional analysts share this opinion Bank of America predicts Rolls-Royce shares will rise even higher to around 1,740p.

Bear Case: Priced for perfection

There is no denying that Rolls-Royce is in a technological frenzy. However, a massive question mark remains whether this will translate into a further raise in share prices.

Bank of America’s aggressive price target depends on the continued success of Rolls-Royce’s core aerospace business, as well as near-perfect execution of the UltraFan and SMR projects. However, this is by no means guaranteed.

UltraFan has been in development for over a decade, while SMR devices will not start generating revenue until the 2030s at the earliest. Until then, there are plenty of opportunities to apply your keys. And that’s why some institutional analysts are predicting Rolls-Royce shares will fall from their current levels.

So what should investors make of all this?

The most significant thing

Rolls-Royce is a truly world-class company, prospering under the leadership of CEO Tufan Erginbilgiç. It has successfully capitalized on the post-pandemic recovery in the civil aviation sector and is now preparing for an even stronger long-term outlook for SMRs and next-generation engines.

However, with a forward price-to-earnings ratio of 35, it appears that much of this upside potential has already been factored into the valuation. Therefore, investors expecting huge returns may find better growth stocks to explore elsewhere.

Is it worth investing £5,000 in Rolls-Royce Plc now?

If investing expert Mark Rogers and his team have stock advice, it can pay to listen. After all, Twelfth Magpie’s flagship Share Advisor newsletter, which it has run for almost a decade, provides thousands of paying members with the best share recommendations from across the UK and US markets.

Mark believes there are 6 standout stocks that investors should consider buying right now. Want to see if Rolls-Royce Plc is on the list?

Zaven Boyrazian does not hold any position in the companies mentioned.