Nvidia (NASDAQ: NVDA) has been a top stock for years, but it has recently become a household name due to its graphics processing units (GPU) powering generative artificial intelligence (AI applications). Demand for Nvidia’s chips has exploded, which is reflected in rising revenue and profits. Investors quickly seized the opportunity, and Nvidia’s stock has soared 783% over the past two years.
Let’s step back a bit and see where a $1,000 investment five years ago could have taken you today.
It’s not just AI
Five years ago, generative AI was a concept reserved strictly for tech professionals, but Nvidia was already a leading chipmaker. It created the GPU in 1999 and transformed the video game industry. Its chips are used in a variety of industries for data computation, including scientific applications and automotive. Because generative AI can be so consumer-oriented, Nvidia has become a recognizable symbol of its power.
Like most companies and industries, Nvidia has had its ups and downs. The company gained 400% in the first two years of the last five years, when the country was flooded with stimulus money and markets were full of optimism. Then, it lost 50% of its value in 11 months due to inflation and the subsequent market crash. Smart investors stuck it out and are now reaping the rewards of buying a great stock and holding it through volatile times.
If you had invested $1,000 five years ago, just before the pandemic and the market chaos that followed, you would have a staggering $31,500 today.
Can Nvidia do it again? Over the long term, it has plenty of opportunities. There could be some pressure in the short term, as Nvidia already enjoys a high valuation and faces competition from the construction sector. So the road ahead could be bumpy over the next couple of years. But if you invest in Nvidia today and hang on to the Wall Street traps, you should be handsomely rewarded in the long run.
Should You Invest $1,000 in Nvidia Right Now?
Before you buy Nvidia stock, consider this:
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Consider when Nvidia I made this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $786,046!*
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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 How Much You’d Have Today was originally published by The Motley Fool
