Nvidia (NASDAQ: NVDA) has been a standout growth investment, with NVDA stock steadily climbing and effectively dominating the quickly rising artificial intelligence (AI) and semiconductor sectors.
A $10,000 investment in Nvidia in 2022
On 16 June 2022, Nvidia shares were trading at $15.60 apiece, according to data provided by NASDAQ.
Had you invested $10,000 back then, you would’ve bought around 641 shares.
The year prior, in 2021, the price was on a decent upward track, climbing from $16.26 at the beginning of June to a $33.37 peak in November 2021.
What caused the stock to drop so drastically by June 2022? Well, in 2022, the stock market saw a sharp decline driven by soaring inflation that triggered aggressive interest rates.
Fears of a worldwide recession were further stoked by Russia’s invasion of Ukraine and the still palpable economic uncertainty caused by the COVID-19 pandemic.
Fast forward a bit, though, and Nvidia stock does a 180, with AI going mainstream and the demand for cutting-edge graphics processing units (GPUs) skyrocketing.
Nvidia capitalized on the trend more than any other company, its chips powering everything from data centers to large language models (LLMs).
By June 2023, Nvidia had not only recovered but surpassed its November 2021 peak, trading at around $43.80 on June 20, 2023.
How much would you have made?
Today, Nvidia trades at roughly $143.03 per share, meaning the 641 shares you bought in June 2022 are now the equivalent of not $10,000 but ~$91,663.
That’s a return of over 816% on your investment in just three years.
The point, however, is that this isn’t a typical outcome. If you invest $10,000 in Nvidia now, a lot of things would have to go right for the same kind of return by 2028.
Previous growth was facilitated by significant technological breakthroughs, growing institutional interest, and Nvidia’s ability to adapt to the changing market.
Things are much different now. Chip export restrictions and macroeconomic uncertainties could always blow some headwind in its direction.
So, as with any stock, future gains are not guaranteed, and all investments come with a dose of risk. But for those who backed Nvidia three years ago and stuck with it, the payoff has certainly been stellar.
Featured image via Shutterstock
