Nvidia (NVDA 4.45%) stock has been the poster child for the current bull market. It has gained more than 220% over the past year and briefly took the top spot as the most valuable company on the stock market before taking a step back.
Currently, there isn't a strong consensus on whether Nvidia stock is worth buying now, but if you were prescient enough to buy it 20 years ago, you'd have a well-padded nest egg.
Once-in-a-lifetime opportunity
If you'd bought Nvidia stock 20 years ago, it wasn't because you envisioned it powering generative artificial intelligence (AI) applications in 2024. But savvy tech investors recognized its value in the chips it made for other kinds of applications, and it was a solid holding even before it became a household name in the current market.
Nvidia went public in 1999 at $12 per share, and it has split six times since: in 2000, 2001, and 2006 in a 2-for-1 split; in 2007 in a 3-for-2 split; in 2021 in a 4-for-1 split; and just this year in its largest ever, a 10-for-1 split. One initial public offering (IPO) share is worth 480 shares today, and the split-adjusted IPO price is $0.04 per share.
Nvidia has been on the market for 25 years now, and it's up 373,000% since its first-day closing price. If you caught on early enough to invest 20 years ago, and you held on through ups and downs, you would have gained 123,200%, at a staggering annualized return of 42.7%. If you'd invested $1,000, you'd be holding on to more than $1.2 million worth of Nvidia stock now.
Nvidia lost a large part of its value several times over the past 20 years. It actually lost a full 50% of its value in 2022, right before it exploded. The lesson? Don't regret what you didn't buy in the past, but when you own a great business, hold on for the long term.
