Nvidia (NVDA 1.55%) has almost become a household name — at least for investors — over the past few years. As the maker of the world’s top artificial intelligence (AI) chips, the company has seen earnings and its stock price skyrocket. Demand is high for AI compute as companies and governments aim to apply this technology to their needs, and Nvidia is benefiting from this momentum.
It’s very clear that if you invested in Nvidia several years ago and held onto the shares, you’ve scored a win — and this is with a bet of any size, from a few dollars to a major investment. Let’s consider a $500 investment in Nvidia made 10 years ago and find out how much you would have now.
Image source: Getty Images.
What happened a decade ago
First, though, let’s talk a bit more about the Nvidia growth story so far. The past 10 years have actually been key for the tech player since this period covers Nvidia’s presence in the world of AI. About a decade ago, the company decided to tailor its graphics processing units (GPUs) to specifically suit this growing market. At the time, AI wasn’t making headlines as it does today, so this was a risky bet — and it turned out to be a successful one.
Over the past few years, companies have recognized the potential of AI to improve their businesses, so they’ve turned to Nvidia for the GPUs needed to develop and use this technology. Customers may find these high-powered chips across cloud service providers, from Amazon to Microsoft, for example.
All of this has helped Nvidia’s revenue and profit soar well into the billions of dollars. In the latest full year, these metrics advanced in the triple digits to $130 billion and $72 billion, respectively.
Now, let’s move along to stock performance. Over the past 10 years, the shares have skyrocketed, so if you invested $500 in Nvidia at the start of that period, you would have more than $114,000 right now. That’s enormous, especially considering the initial investment wasn’t a huge one.
Today’s Change
(-1.55%) $-2.85
Current Price
$180.93
Key Data Points
Market Cap
$4397B
Day’s Range
$176.62 – $181.32
52wk Range
$86.62 – $212.19
Volume
182M
Avg Vol
190M
Gross Margin
70.05%
Dividend Yield
0.02%
Does Nvidia still have room to run?
Today, however, you might be wondering if buying and holding Nvidia stock still is a good idea. A reasonable question is: How long can this supercharged stock continue to soar? It’s impossible to predict Nvidia’s moves over the short term — the stock could flounder or stagnate at a certain point. But there is reason to believe that this market leader still has plenty of room to run over the long term.
In fact, there are several reasons to be optimistic about Nvidia’s future earnings and stock performance. One major point is that high-performance GPUs are needed for AI models to complete their tasks — this means that the GPU could be an essential tool well into the future as AI is put to work. Of course, other companies make AI chips, but Nvidia has maintained its lead, and the company’s focus on frequent innovation should help it remain on top.
It’s also important to remember that Nvidia’s customers, such as Amazon and Microsoft as I mentioned above, are technology titans with the financial strength to invest in the best products available. And their desire to win in AI also pushes them toward the fastest GPUs available. All of this works in Nvidia’s favor.
Finally, Nvidia’s role in AI likely will continue to evolve in a positive way. The company has developed various platforms for industries — for example, it’s working with major automakers on their autonomous vehicle projects. And Nvidia is getting in early on another area that could deliver explosive growth in the years to come: robotics. The company has developed three computers that take a robot from the training phase to the use stage. Nvidia has even predicted that this will become the next $10 trillion industry.
All of this means Nvidia stock may still be a great place to park your $500 for a decade — or even longer.
