If you invested $1,000 in Nvidia 10 years ago, here’s how much you’d have now

Nvidia

U.S. tech company Nvidia released quarterly earnings this week and despite low Wall Street expectations for the chipmaker, its performance was good. Following the announcement after the market close Thursday, the shares increased as much as 7%, and its share price is currently floating around $160.

If you invested in Nvidia (NVDA) 10 years ago, you would end up with a lucrative return. A $1,000 investment in 2009 would be worth almost $13,000 as of Aug. 16, 2019, for a total return of nearly 1,200%, according to CNBC calculations. By comparison, a $1,000 investment in the S&P 500 would have earned a total return of around 250% over the same period.

Since its launch in 1993, the tech company which specializes in manufacturing high-end graphics processors, has become a big player within the gaming and artificial intelligence (AI) industries. Nvidia is in the middle of getting back to normal after channel-inventory issues emerged last year, and now, ahead of the back-to-school season, the company’s chief financial officer Colette Kress told analysts on Thursday to expect Nvidia’s key gaming business “to grow to reach the full normalization” by the end of the current quarter.

For its fiscal second quarter, Nvidia reported earnings of $1.24 per share, versus $1.15 expected by analysts. Revenue landed at $2.58 billion, versus the predicted $2.54. Gaming, the company’s biggest segment, contributed revenue of $1.31 billion, down 27% from a year earlier but just above estimates of $1.30 billion.

While Nvidia’s stock has done well over the years, any individual stock can over or underperform, and past returns do not predict future results.

Looking forward, the future of Nvidia could go either way, especially given how quickly technology progresses. On Thursday, Nvidia CEO Jensen Huang told CNBC that he’s not currently worried about companies like Google, Amazon, Facebook or Tesla becoming competitors, especially since those firms are Nvidia customers and Google is the only one he knows that produces its own silicon at scale.

However, while Nvidia still dominates the data center market, experts say its competitors, such as AMD, do pose a threat. Jon Peddie, of Jon Peddie Research, told CNBC in an email that he thinks AMD “has won some great engagements and will be increasing its share” in the market by the end of 2020. There is hope that Nvidia’s growth will continue given its long-term plans of integrating its AI technology into self-driving cars.

In June, the company’s stock increased suddenly after it announced a partnership with Volvo. Nvidia also has partnerships with other major automakers, such as Toyata and Audi.

As an investor, experts often advise starting with index funds, which hold every stock in an index, such as the S&P 500. Seasoned investor Warren Buffett agrees that it’s a smart idea to start with index funds, in part because they fluctuate with the market, making them less risky than individually selected stocks.


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Bobbi Maughan

In an ever changing business landscape, a number of policies are made and re-made, in order to keep the markets moving with the times. These changes are documented by Bobbi, who is an excellent writer, and an even better storyteller! Her pieces, unlike other business news items, are not dry, or lacking in empathy! Bobbi is the classic center capitalist with a soft leaning for socialist welfare! She writes for the Business section of Business Release 9.

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