Investors made a decision in 2015 that greatly impacted their future: Some chose to buy shares of Nvidia (NVDA +0.10%). However, it's fair to say that most didn't. Either way, though, a decision was made intentionally or not.
Those of us who didn't opt to buy shares of Nvidia back then could feel like kicking ourselves now. Nvidia became one of the biggest winners around. Some investors who bought and held their shares of the GPU maker are sitting atop a fortune today. Here's how much it would have taken to become a millionaire if you invested in Nvidia stock 10 years ago.
NASDAQ: NVDA
Key Data Points
A shockingly low sum
Most investors would probably be ecstatic with a stock that became a 10-bagger over 10 years. I'm not sure what word expresses the emotions that would be felt with a stock that delivered a gain of 28.5x. That's how much Nvidia has skyrocketed since January 2015.
The total return generated by Nvidia is even greater, though. Nvidia initiated its dividend program in 2012. Although its dividend yield remains puny, reinvesting the dividends through the years would have paid off nicely. Nvidia's total return over the last 10 years is more than 29.6x.
You might be surprised at how little up-front money is needed to grow into $1 million over 10 years with a stock that delivers a 29.6x-plus total return. Believe it or not, if you invested only $3,625 in Nvidia stock in January 2015 and never sold, your position would be worth $1 million today.
Sure, $3,625 might seem like a lot of money to some. However, it translates to less than $10 per day for a year ($9.93, to be exact). Many people could find a way to come up with that amount if they knew it could make them a millionaire within a decade.
What signs in 2015 pointed to Nvidia's potential for huge success?
Of course, most investors had no idea that Nvidia would be such a massive moneymaker back then. Were there any signs that pointed to the company's potential for huge success? Actually, yes.
Nvidia's most recent quarterly regulatory filing in early 2015 was for its fiscal 2015 third-quarter results. This filing was submitted in November 2014. Nvidia listed data centers among its top target markets. The company noted that in Q2 of fiscal 2015, "[W]e extended our reach in data center accelerated computing, with the world's 15 most highly efficient supercomputers all utilizing our Tesla GPUs." This statement provided a clue about the inroads Nvidia was already making in the data center market.
It was also no secret at the time that Nvidia's GPUs were especially useful in powering artificial intelligence (AI) applications. The company acknowledged this in its annual report filed in March 2015, mentioning 10 times that its chips were used in deep learning.
You could have easily determined that AI was poised to take off in a major way, too. For example, Pew Research Center published a report in August 2014 titled, "Predictions for the State of AI and Robotics in 2025." Most of the experts quoted in the report predicted an AI explosion over the next decade. DotSUB CEO David Orban was eerily prescient, saying, "It will be natural to talk to computers of any shape, and expect them to understand the words, and the meaning, and to establish a dialog leading rapidly to the desired goal."
Is Nvidia still a millionaire maker?
Could you become a millionaire in 10 years by investing $3,625 in Nvidia stock today? Probably not. However, I think Nvidia might still be a millionaire maker over the next two decades for anyone investing $200,000 or more.
Nvidia's GPUs continue to enjoy tremendous demand in training and deploying AI models. The company is launching new, more powerful chips at a faster pace than ever. Artificial general intelligence (AGI) could arrive within a few years, opening up an even larger market for Nvidia.
Investors looking for another stock that could turn a relatively small amount into $1 million over the next 10 years, though, should look elsewhere. Perhaps the quantum computing market could offer such an opportunity.
