If You'd Invested $1,000 in Nvidia Stock 5 Years Ago, Here's How Much You'd Have Today

Source Motley_fool

Plenty of shareholders profess a long-term buy and hold strategy, but periods of significant volatility can test the mettle of even the most seasoned investor. Over the past half decade, such has been the case with Nvidia (NASDAQ: NVDA). After gaining more than 800% in roughly two years, the stock has lost more than a third of its value. However, volatility notwithstanding, investors who stayed the course have been amply rewarded.

Five years ago, Nvidia was the leading provider of graphics processing units (GPUs) used by gamers, which represented roughly half the company's fiscal 2020 revenue, while its data center segment generated about 27%. The company's growth was tepid that year, though it continued to improve as the year progressed. Gaming revenue fell 12%, while data center revenue edged just 2% higher. In all, total revenue of $10.91 billion fell 7% year over year, while earnings per share (EPS) of $4.52 slumped 32%.

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Fast forward to today and Nvidia is a much different company. For its fiscal 2025 (ended Jan. 26), revenue of $130.5 billion soared 114% year over year, while its diluted EPS of $2.94 surged 147%. Data center revenue – fueled by robust adoption of generative artificial intelligence (AI) – jumped 142% year over year to a record $115.2 billion. Gaming revenue is now a much more modest contributor, rising 9% to $11.4 billion.

The ongoing trade war, tariff uncertainty, a recent ban on chip sales to China, and growing investor fears have weighed on Nvidia stock, which is 34% off its peak (as of this writing).

However, long-term investors have seen this movie before. In fact, between Nov. 2021 and Oct. 2022, Nvidia stock lost more than 66% of its value, only to soar to new heights.

NVDA Chart

Data by YCharts

In fact, if you'd invested $1,000 in Nvidia stock five years ago, you'd have more than $14,500 today. In all fairness, it would have been difficult to predict the soaring demand for AI. That said, it helps illustrate the importance of a long-term outlook and the potential rewards that lie ahead.

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Danny Vena has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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