If You'd Put $1,000 Into Nvidia Stock 20 Years Ago, Here's What You'd Have Today

Nvidia (NVDA) stock cemented its place as the hottest way to bet on the explosive growth of generative artificial intelligence (AI) in 2023. Seemingly insatiable demand on the part of AI data centers for Nvidia's graphical processing units (GPUs) propelled NVDA stock past $1 trillion in market capitalization midway through the year, and Wall Street thinks it has plenty more upside left. 

But then long-time shareholders should be used to such outsized returns by now. 

That's because despite its high volatility – and some rather vertiginous ups and downs along the way – this semiconductor stock has vastly outperformed the broader market since going public at the end of the last century. 

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But before we take a look at Nvidia stock's illustrious past, let's recap how it's been doing recently.

After losing half its value last year – and attracting some bargain-hunting billionaire investors around its share-price nadir – NVDA stock more than tripled on a price basis for the year-to-date through Nov. 5. The S&P 500 was up 14% over the same span. 

Nvidia stock's market-beating ways go much farther back than that, however. In fact, few stocks have done more for investors over the past few decades than Nvidia. From its initial public offering at $12 a share in January 1999 through December 2020, NVDA stock created $309.4 billion in shareholder wealth, according to an analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University. 

Indeed, per Bessembinder's findings, which account for a stock's increase in market value adjusted for cash flows in and out of the business and other adjustments, Nvidia is one of the 30 best stocks of the past 30 years. 

Looked at another way, in less than 25 years as a publicly traded company, Nvidia stock has now generated an annualized total return (price change plus dividends) of 29.4%. The S&P 500, with dividends reinvested, returned an annualized 9.9% over the same period. 

Importantly, most of the shareholder wealth generated by Nvidia came over just the past few years. That's because back in the day, the primary market for Nvidia's GPUs consisted of PC and console video game enthusiasts. 

Happily for Nvidia, it just so happens that the company's powerful GPUs and related intellectual property are indispensable to the fields of artificial intelligence (AI), professional visualization, cryptocurrency mining and more. As noted above, NVDA processors are in demand for use in data centers – and especially data centers that power generative AI. Indeed, the company is struggling to keep up with demand. 

Few blue chip stocks offer so much exposure to so many emerging endeavors, which helps explain NVDA stock's amazing returns.

But as remarkable as the company's business may be, it doesn't quite get to the heart of what NVDA stock has meant to long-term shareholders and their brokerage statements. For that, consider the following facts about Nvidia stock.

The bottom line on Nvidia stock?

Over the past two decades, Nvidia stock generated an annualized total return (price change plus dividends) of 33.6%. The S&P 500, by comparison, generated an annualized total return of 9.5% over the same span.

What does that mean in dollar terms? Have a look at the above chart and you'll see that if you invested $1,000 in Nvidia stock 20 years ago, it would today be worth almost $333,000. The same amount invested in the S&P 500 would theoretically be worth about $6,200 today.  

As for adding to NVDA at current levels, the Street remains bullish even after the stock's incredible 2023 run. Of the 53 analysts issuing opinions on Nvidia stock surveyed by S&P Global Market Intelligence, 38 rate it at Strong Buy, 12 say Buy and three call it a Hold. That works out to a consensus recommendation of Strong Buy. 

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