Picture yourself in 2014. At the time, it was called an up-and-coming chip company Nvidia (NASDAQ: NVDA)with graphics processors that were popular in video game applications.
Things weren’t bad, as video games were a growth industry, albeit cyclical. But 2014 was a tough year. Nvidia even recorded revenue in the second quarter of that year reject.
With these kinds of results, investors might have seen Nvidia as an already mature company. But those who look deeper may have heard of Nvidia’s new software platform called CUDA (Compute Unified Device Architecture), which allowed Nvidia graphics chips to perform data processing in a parallel format. That meant that many calculations could be performed simultaneously, while CPUs calculated the data in a linear fashion.
Some hypothesized that CUDA-compatible GPUs would one day overtake the mighty CPU as the leading type of computer processor in data centers. If you had placed a modest $1,000 bet on that scenario, here’s how much you would have made.
$280,000!
A modest $1,000 investment in Nvidia in June 2014 would have grown (including dividends) to a staggering $280,600 today! That’s a 280-bagger, which equates to a gain of 27,960%.
Two things happened. The possibilities of generative artificial intelligence technology became apparent after the introduction of ChatGPT in late 2022, and Nvidia’s GPUs became the best way to perform the massive number of calculations needed to train these models. As a result, companies began to think over themselves to purchase these coveted chips.
That helped Nvidia’s revenue jump 262% to $26 billion last quarter, while its net margin rose to 58.5%. For reference, in the second quarter of 2014, Nvidia made just $977 million in revenue, with adjusted (non-GAAP) net margins of 13.6%.
A life-changing investment
As Nvidia shows, an early investment in just one incredible growth stock can make up for dozens of mediocre stock picks and make a huge difference to your financial security and independence. While not many stocks will become the next Nvidia, the “next Nvidia” could be out there waiting to be discovered in the market today.
Should You Invest $1,000 in Nvidia Now?
Before you buy shares in Nvidia, consider the following:
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Billy Duberstein and/or his clients have no positions in 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 ten years ago, here’s how much you’d have today. originally published by The Motley Fool
