Like many investors, I was relatively late to hop on the Nvidia(NASDAQ: NVDA) train. However, I owned the stock for several years, long enough to reap tremendous returns.
Do I wish I had bought Nvidia shares earlier? You bet. As they say, hindsight is 20/20. Some investors, though, did buy the graphics process unit (GPU) maker at the beginning. How much money would you have now if you had invested $10,000 in Nvidia stock at its initial public offering (IPO)?
Party like it's 1999
Nvidia was founded in April 1993. However, you couldn't invest in the company then. It didn't go public until Jan. 22, 1999. Nvidia's stock first traded at $12 per share.
From the beginning, Nvidia made GPUs. However, as the "G" in the acronym reflects, these chips were focused on graphics. In particular, Nvidia sold its GPUs to PC makers to support high-performance PC applications -- primarily video games.
Nvidia in early 1999 was already generating impressive revenue growth. In the company's S1 filing before its IPO, it revealed that sales skyrocketed more than 15.7 times year over year during the nine months ended Oct. 25, 1998, compared to the nine months ended Sept. 28, 1997. (The different end dates reflected a change in Nvidia's fiscal-year reporting.)
However, it wasn't a slam dunk back then that Nvidia would be successful over the long run. The company was losing money. It faced significant competition, including a major threat from Intel. Nvidia was also embroiled in heated litigation with SGI, now owned by HP, alleging the company had infringed on its patents.
Persistence pays off
Let's suppose, though, that you had faith in January 1999 that Nvidia would overcome its challenges. You weren't worried about Intel or other rivals. And you liked Nvidia's chances in the patent dispute with SGI. Because of your optimism, you decided to plunk down $10,000 and buy 833 shares of the GPU maker.
By late 2001, your initial investment would have jumped to over $135,000. However, the bottom soon fell out for Nvidia. Its shares plunged nearly 90% by early October 2002. Most investors probably would have bailed out before then. Let's assume, though, that you retained a strong conviction about Nvidia's long-term prospects and didn't sell any of your position.
That would have been a smart decision, of course. By late 2006, your stake in Nvidia would have set a new high. On Oct. 1, 2007, your $10,000 would have grown to over $230,000. The euphoria wouldn't last long, though. The financial crisis that began to unfold in late 2007 and extended into 2009 caused Nvidia's share price to again plummet by more than 80%.
It would take several years for Nvidia to set a new high. However, beginning in 2015, the stock went on a tear. By late 2017, your initial investment would have been worth over $1 million. This astounding success could have led some investors to take profits off the table. But we'll assume you didn't.
Once again, that would've been a brilliant move. By May 2020, you'd have become a multimillionaire. Then came the generative AI explosion in 2023 and 2024. At the end of last year, your initial $10,000 position in Nvidia would have grown to over $12 million. If you continued to hold on to all of your shares, your investment would today be worth (drum roll, please)...over $30 million.
Should you invest $10,000 in Nvidia now?
A hearty congratulations to all investors who had the foresight to buy Nvidia early on, the patience to hold it through the gut-wrenching downward spirals, and the prescience not to take the money and run along the way when it performed well. But what about the many other investors who didn't become multimillionaires investing in Nvidia? Should you invest $10,000 in the stock now?
You probably already know the odds of anything close to a similar run are slim to none. The challenge of finding any stock that could repeat what Nvidia has done is daunting.
Still, I think it's possible that buying $10,000 worth of Nvidia shares now could pay off handsomely over the next 10 to 20 years. But I also think other stocks offer even more attractive risk-reward propositions than Nvidia.
Should you invest $1,000 in Nvidia right now?
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends HP and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short August 2024 $35 calls on Intel. The Motley Fool has a disclosure policy.
