Nvidia (NASDAQ: NVDA) has been a top stock for years, but has recently become a household name thanks to its graphics processing units (GPUs) that power generative artificial intelligence (AI) applications. Demand for Nvidia’s chips has skyrocketed, and that’s reflected in rising revenues and profits. Investors were quick to jump on the opportunity, and Nvidia shares have risen 783% in the past two years.
Let’s go back in time and see what an investment of $1,000 five years ago could have earned you today.
It’s not just the AI
Five years ago, generative AI was a concept strictly for techies, but Nvidia was already a top chipmaker. It created the GPU in 1999 and transformed the gaming industry, and its chips are used in a variety of data computing industries, including scientific applications and automotive. Because generative AI can be intensely consumer-focused, Nvidia has become a recognizable symbol of its power.
Like most companies and industries, Nvidia has had its ups and downs. It gained 400% between the first two of the past five years, when the country was flooded with stimulus money and markets were giddy with optimism. Then it lost a full 50% of its value in 11 months due to inflation and the market crashes that followed. Smart investors held on and are now reaping the rewards of buying a great stock and holding on through periods of volatility.
If you had invested $1,000 five years ago, just before the pandemic and the ensuing market chaos, you would now have a whopping $31,500.
Can Nvidia do it again? In the long run, it has plenty of opportunities. There may be some short-term pressure, as Nvidia already has a high valuation and is facing a buildup of competition. So the road ahead could be bumpy for the next few years. But if you invest in Nvidia today and hold on through Wall Street’s potholes, you should be richly rewarded in the long run.
Should You Invest $1,000 in Nvidia Now?
Before you buy Nvidia stock, here are some things to consider:
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
If You Invested $1,000 In Nvidia Stock 5 Years Ago, Here’s What You’d Have Now, originally published by The Motley Fool
