Nvidia's Remarkable Journey: From IPO to AI Powerhouse

If You Bought 1 Share of Nvidia at Its IPO, Here's How Many Shares You Would Own Now | The Motley Fool

The chipmaker has created a veritable windfall for investors. Since its IPO in January 1999, Nvidia (NVDA -2.13%) has established itself as one of the world's most successful companies. It has been particularly adept at adapting its technology to expand into new markets. The company pioneered the graphics processing units (GPUs) that revolutionized the gaming industry, turning boxy figures into lifelike images. The secret to its success was parallel processing, which allowed the chips to conduct a multitude of mathematical calculations simultaneously. Nvidia's processors are now used for product design, autonomous systems, cloud computing, data centers, artificial intelligence (AI), and more. The ability to adapt its technology has been a boon to shareholders. Even if investors didn't get in on the IPO itself, Nvidia shares fell below their issue price numerous times in early 1999. For investors fortunate enough to get shares at (or below) the $12 IPO price, the stock has returned 493,940%. While a single share of stock might seem inconsequential at first glance, one share of the right stock can have a huge impact on an investor's success. In Nvidia's case, the company's performance and soaring stock price have resulted in numerous stock splits, turning one share into many more. Here's a list of Nvidia's stock splits over the years: As a result of the multiple stock splits, an investor who bought just one share of Nvidia stock near its IPO in 1999 would now be the proud owner of 480 shares. However, it took a great deal of discipline and self-control to hold Nvidia for more than 25 years and reap this windfall. The stock has lost more than half its value on numerous occasions, which sent fair-weather investors scrambling for the exits. That said, consider this: A $1,000 investment in Nvidia made in early 1999 would now be worth more than $4.9 million.

If You'd Invested $1,000 in Nvidia Stock 5 Years Ago, Here's How Much You'd Have Today | The Motley Fool

You may wish you'd bought the chipmaker's shares back in the 1990s, but what about just five years ago? Nvidia (NVDA -2.13%) is undoubtedly one of the hottest stocks in the market and has been for a few years now. Its position as a provider of key hardware for the artificial intelligence (AI) space has fueled quarter after quarter of triple-digit growth for its sales and earnings. While the stock has gained nearly 750% since the beginning of last year, it has charted a somewhat rocky course over the past few months. But Nvidia looks on track to keep growing sales of its high-end graphics processing units (GPUs) and remain the industry's dominant supplier. The company's recent successes and its new place in the popular consciousness come almost exclusively from AI, where tech giants like Meta Platforms and Alphabet have been spending lavishly to build supercomputers and new AI data centers. This isn't an overnight success story, though. The company has been providing rapid processing power to the video gaming and graphics markets since the early 1990s. Its GPUs previously transformed video game graphics and helped build that industry into what it is today. More recently, the company saw a mini-boom during the last major crypto bull market as cryptocurrency miners scooped up its GPUs to power the machines that mine proof-of-work coins. Still, none of those successes can really compare to the last two years. A $1,000 investment made in Nvidia five years ago would be worth more than $28,000 today (with dividends reinvested). I'm sure many people wish they bought shares of Nvidia back in 2019, or better yet, back in 1999 when the company went public. But hindsight is 20/20, and there's no need to beat yourself up for missing out. Unless you're the luckiest investor in history, you're going to miss some opportunities. What's more important is continuing to look for great investments, and building a diverse portfolio of solid companies with positions you intend to hold for at least five years. Nvidia could still be a very profitable addition to such a portfolio -- this company is not done growing.

Is Nvidia Still a Millionaire-Maker Stock? | The Motley Fool

Many of the company's early investors have become rich. But is it too late to board this gravy train? The stock market is ideal for slowly building wealth over decades. However, some investors have sped things up by betting on the right companies at the right times. Nvidia (NVDA -2.13%) is a great example. If you had bought $5,000 worth of its stock 10 years ago, you would have around $1.25 million today -- a return of 25,000%. Does the legendary chipmaker still have millionaire-maker potential? Let's dig deeper to find out. In 1993, Nvidia was founded to pioneer a niche computer chip called the graphics processing unit (GPU). These chips excel at processing multiple tasks simultaneously, making them ideal for rendering complex visuals. Most of Nvidia's early growth came from serving the video game industry, where its chips were used in custom PCs and consoles. However, the 2009 launch of Bitcoin (and the subsequent rise of cryptocurrencies) was the company's first big break. At the time, most blockchain networks ran on a system called proof-of-work (PoW), which required participants called miners to solve complex computations to validate transactions and create new coins. GPUs were perfect for this task. And Nvidia's revenue and profits soared in response to this new market. As mining demand faded after the pandemic, ChatGPT's launch in 2022 kicked off another boom cycle for the company and its quintessential hardware products. While past performance doesn't guarantee future results, Nvidia's history demonstrates a distinct boom-and-bust pattern. The chipmaker has produced many millionaires over the long term, but investors who bought shares at the peaks of previous hype cycles faced substantial losses as they waited for the company to discover new opportunities. Unfortunately, the AI hype cycle is getting long in the tooth. And Wall Street is getting nervous. According to projections from the nonprofit RAND Corporation, more than 80% of AI projects could eventually fail -- double the rate for non-AI-related tech start-ups. There are many reasons for the high failure rate, but the most obvious is that AI technology simply isn't easy to monetize. Mainstream large language models (LLMs) like ChatGPT or Gemini are fun to play around with, but they can be unreliable and expensive to run because of the high costs of hardware and energy. These platforms also face stiff competition from free, open-source alternatives like Meta Platform's Llama or Elon Musk's Grok. If the consumer-facing software side of the market doesn't start carrying its weight, demand growth for Nvidia's hardware could eventually slow or even reverse. If Nvidia's business is on the verge of a spectacular crash, there have been no signs of it yet. Second-quarter earnings were another slam dunk, with revenue increasing 122% year over year to $30 billion while operating income jumped 156% to $19.9 billion. And management believes the launch of GPUs based on the new Blackwell architecture will help maintain its spectacular momentum over the coming years. The stock's valuation is also extremely attractive. With a forward price-to-earnings multiple (P/E) of 41, shares are more expensive than the Nasdaq 100 estimate of 29. But this is actually surprisingly cheap for a company growing its top and bottom lines at triple-digit rates. The market seems to be discounting Nvidia's shares on fears that the AI industry might not meet expectations. The stock still has millionaire-maker potential, but long-term investors might want to wait for the current hype cycle to fade before betting on the chipmaker's next big break.