Hindsight is a beautiful thing, and most of the time, the genius behind some of humanity's greatest innovations is only apparent looking backward. Nobody knew we needed computers until we had them, and the concept of a smartphone sounded ludicrous until... well... it wasn't.
The same goes for investing. It's impossible to know ahead of time that a financial asset will increase in value by a life-changing amount -- whether it's a stock or a cryptocurrency. But it does happen, and the markets are filled with great examples.
I'm going to share three of them. Each one would have generated a gain of more than $10 million from a well-timed initial investment of $10,000, assuming the investor was still holding on today. Let's explore the details.
1. Nvidia
Nvidia (NVDA 6.18%) is currently one of the most exciting companies in the world. Its humble beginnings date back to 1993, when a trio of engineers (including the company's current CEO Jensen Huang) sought to bring 3D graphics to computer games and multimedia.
By 1999, the company had delivered the first-ever graphics processing unit (GPU), which trounced the performance of all of its prior chips. That's precisely when Nvidia's GeForce brand was born, and it still produces the world's most powerful GPUs. Today, those chips are the driving force behind advanced technologies like artificial intelligence (AI), a rapidly growing industry Nvidia is leading.
The company's hardware is responsible for training OpenAI's ChatGPT chatbot, and businesses across the globe will soon have access to the Nvidia DGX AI supercomputer through top cloud providers like Microsoft (MSFT 1.82%) Azure.
Nvidia stock was listed publicly in 1999 at $12 per share. After experiencing significant growth, management executed five stock splits to ensure the share price remained accessible to smaller investors. As a result, an investor who committed $10,000 at the company's initial public offering (IPO) would have 39,984 shares today with a cost basis of $0.25 per share.
Since Nvidia stock currently trades at $270.37, that investment would be worth a whopping $10.8 million now. But here's the better news -- the stock probably isn't done going higher.
2. Microsoft
Few companies have experienced as much long-term success as Microsoft. It started in software development in 1975, and its early successes like Windows and Word are still used by billions of customers today. But the company has aggressively expanded into other industries like hardware, gaming, cloud computing, and artificial intelligence -- all of which have contributed to its current $2.2 trillion market valuation.
Microsoft's cloud platform, Azure, assists businesses with their digital transformation. It can be used to store data and develop software, and thanks to Microsoft's multibillion-dollar investment in OpenAI, it provides customers with some of the most advanced AI tools on the market.
Microsoft has integrated the ChatGPT chatbot into its Bing search engine in an attempt to disrupt Alphabet's Google, which has a dominant 93% global market share. The pairing has incredible potential, and it's one of the reasons I think Microsoft could become the world's first-ever $5 trillion company.
The company went public in 1986 at $21 per share. Following nine stock splits since then, IPO investors would now have a cost basis of $0.0729 per share, meaning they'd be holding 137,119 shares for their initial $10,000 purchase.
Microsoft stock trades at $291.60 per share today, so that $10,000 would be worth $39.9 million now.
3. Bitcoin
No financial asset class has ever split the investment world down the middle quite like cryptocurrencies, and the debate continues to rage on. On the bullish side, people see highly transmissible digital tokens with the potential to replace traditional fiat currencies. But those with a bearish view don't see the benefit, and a lack of regulation makes owning crypto tokens rather risky. The evidence of that piled up in 2022, reaching a crescendo with the collapse of FTX, one of the world's largest exchanges.
Nonetheless, it's impossible to deny the surging returns some tokens have generated. Bitcoin (BTC 1.06%) is the largest of them all with a current market value of $546 billion, meaning it represents about 46% of the total market capitalization of all cryptocurrencies in existence.
Bitcoin is a truly decentralized cryptocurrency. There is no one person or entity that controls it, which is in stark contrast to thousands of tokens created since. As a result, investors view Bitcoin not only as a currency to transact with, but also as a store of value because it's incorruptible. It runs on blockchain technology, which serves as a public ledger with records for every Bitcoin transaction, ever.
Bitcoin was launched in 2009, but the first recorded real-world transaction didn't happen until May 22, 2010. A person by the name of Laszlo Hanyecz used 10,000 Bitcoin to buy two pizzas from Papa John's, through an indirect transaction that included another individual named Jeremy Sturdivant, worth about $41.
That placed Bitcoin at a price of $0.004 at the time. The token was only trading on one known exchange back then, called BitcoinMarket, but an investor could have theoretically acquired a whopping 2.5 million tokens for $10,000.
Since one Bitcoin currently changes hands for $28,306, that initial investment would be worth a mind-blowing $70.7 billion today! But, of course, it would have taken nerves of steel to put $10,000 into such an unknown, speculative investment back then. And it would have taken true diamond hands to hold on to the tokens this entire time! Looking ahead, some Bitcoin analysts think there's still plenty of upside left in the tank.
