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Sunday, July 14, 2024

How Much Would an Early Investment in Nvidia Be Worth Now?

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If you went back 25 years and invested $10,000 in Nvidia stock when the company went public (and held on through the ups and downs), how much would your initial investment be worth now?

An analysis from 31-year-old financial services company The Motley Fool has the answer: Over $30 million.

That’s more than double what the investment would have been worth at the end of 2023 ($12 million) and thirty times what the investment would have yielded in late 2017 ($1 million), per the analysis.

Related: Elon Musk, Dell, Nvidia Team Up on AI Factory, Supercomputer

Nvidia was founded in 1993 and went public six years later in January 1999, first trading at $12 per share.

The tech giant is one of the Magnificent Seven, a term coined in 2023 to describe Amazon, Alphabet, Apple, Meta, Nvidia, Microsoft, and Tesla for their notable influence on the market. More than belonging to this group, Nvidia has led it in performance.

As of Monday, Nvidia had a year-to-date return of about 147% compared to Meta’s 41% and Alphabet’s 30.55%.

Amazon, Microsoft, and Tesla had year-to-date returns of 29%, 20.26%, and -16%, respectively.

Nvidia alone accounts for one-third of S&P 500 gains this year.

Related: Nvidia CEO Jensen Huang Reveals His Competition Strategy

The reason for Nvidia’s growth is its crucial position in the AI boom: Nvidia’s graphics processing units (GPUs), which have been around for 30 years and power visuals on video games, laptops, and more, are the brains of ChatGPT.

CEO Jensen Huang formed an early partnership with OpenAI in 2016 with a gift AI supercomputer. Nvidia now holds 80% of the AI chip market and tens of thousands of its chips power ChatGPT and other AI.

Nvidia CEO Jensen Huang. Photo by I-HWA CHENG/AFP via Getty Images

Nvidia’s growth has benefitted some of its longer-term employees who receive stock bonuses. At a December company meeting, Huang reportedly urged these “semi-retired” employees to become the CEOs of their time.

Related: Employees Who Worked at This Company for the Past 5 Years Are Now Multi-Millionaires in ‘Semi-Retirement’

Though Nvidia now leads the AI chip market, competition is growing from established companies like Intel, startups like Etched, and even Nvidia’s own customers. About 40% of Nvidia’s revenue is believed to come from Microsoft, Meta, Amazon, and Alphabet.



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