Imagine yourself in 2014. Back then, there was an up-and-coming chip company called Nvidia (NVDA 3.51%), with graphics processors that were popular in video game applications.
Things weren’t bad, as video games were a growth industry, though cyclical. But 2014 was a tough year. In fact, in the second quarter of that year, Nvidia posted a revenue decline.
With those types of results, investors might have viewed Nvidia as an already-mature company. But those looking more deeply might have learned of Nvidia’s new software platform called CUDA (Compute Unified Device Architecture), which enabled Nvidia graphics chips to execute data processing in a parallel format. That meant many calculations could be executed simultaneously, whereas CPUs calculated data in a linear fashion.
Some hypothesized that CUDA-enabled GPUs would one day overtake the mighty CPU as the main type of data center computing processor. Had one placed a modest $1,000 bet on that scenario, here’s how much you would have made.
$280,000!
A modest $1,000 investment in Nvidia in June of 2014 would have grown (dividends included) to a stunning $280,600 today! That’s a 280-bagger, amounting to a 27,960% gain.
NVDA data by YCharts.
Two things happened. The capabilities of generative artificial intelligence technology became apparent following the introduction of ChatGPT in late 2022 and Nvidia’s GPUs became the best way to execute the massive number of calculations needed to train these models. As a result, enterprises began falling over themselves to buy these coveted chips.
That sent Nvidia’s revenue up 262% last quarter to $26 billion, with net margin surging to 58.5%. For reference, in Q2 2014, Nvidia made just $977 million in revenue, with adjusted (non-GAAP) net margins of 13.6%.
A life-changing investment
As Nvidia shows, investing in just one incredible growth stock early on can make up for dozens of mediocre stock picks and make a huge difference to your financial security and independence. While not many stocks will turn into the next Nvidia, the “next Nvidia” could be out there waiting to be uncovered in the market today.
