Last tax season, the IRS issued nearly 95 million refunds, totaling more than $266 billion. As of May 12, 2023, the average tax refund was $2,812. If you invested this amount in Nvidia stock a year ago, you might be curious about the current value of your investment.
NVIDIA Corp. (NASDAQ:NVDA) has been on an extraordinary ride over the past five years, especially since early 2024. The stock has risen 186% since May 2023, driven by strong demand for AI chips, and its market value has risen from $1 trillion to $2.7 trillion.
As of May 30, 2024, the company’s share price was an impressive $1,150. If you had invested your $2,812 tax refund in Nvidia stock a year ago when the stock price was around $290, you could have bought about 9.7 shares.
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Fast forward to today. Those 9.7 shares would now be worth about $11,155, meaning your initial investment of $2,812 would have grown by $8,343 in just one year. That is an impressive return of almost 300%.
Nvidia’s extraordinary growth
Last fiscal year, the chipmaker generated nearly $61 billion in revenue, a significant increase from about $27 billion the year before. Even more impressive is the company’s most recent quarterly report, which showed revenue of $26 billion – a massive 262% increase compared to the same quarter last year.
It’s unusual for a company as big as Nvidia to grow so quickly. However, Nvidia has defied all expectations and its incredible growth has brought its market value to approximately $2.7 trillion, more than Amazon’s $1.84 trillion and Tesla’s $563.84 billion combined.
This tremendous growth shows that Nvidia is standing out in the business community and offering significant opportunities for those who invested early.
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Now Nvidia’s $2.7 trillion market cap is just 4% lower than Apple’s $2.9 trillion valuation and 11% of Microsoft’s $3.2 trillion, putting Nvidia on the brink of becoming the world’s most valuable company to become.
Analysts suggest caution
Despite all the positive signs for Nvidia, analysts suggest that investors shouldn’t put all their money into just one stock. They recommend diversifying investments by spreading money across different stocks instead of betting everything on one company.
“As the majority of AI workloads in the cloud move from training to inference, Nvidia’s dominant market share position will be challenged. Most inference use cases do not require the depth/amount of computing provided by Nvidia’s best GPUs,” says Lucas Keh, an analyst at Third Bridge explained.
Is Nvidia’s extreme growth ending, or is it just the beginning? Time will tell. That doesn’t mean you shouldn’t save or even invest your tax return. From Tokyo to New York, stock markets are seeing unprecedented growth, and you could be leaving money on the table if you don’t invest.
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This article If You Invested The Average Tax Return Of $2,812 In Nvidia Stock Last Year, Here’s How Much It Would Be Worth Today originally appeared on Benzinga.com
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