Should You Have Invested $10,000 in NVIDIA 5 Years Ago? Here’s How Much That Would Be Worth Today

John Smith

NVIDIA Corporation has been making waves in the stock market for the past 5 years, and those who got in on it early have been making big bucks. Want to know how much your $10,000 investment in NVIDIA in February 2019 would be worth today? Well, let’s dive deeper into NVIDIA’s stock performance over the last 5 years and find out.

On February 8, 2019, NVIDIA stock closed that day at $37.04 per share. but guess what? Today, February 7, 2024, NVIDIA is trading at $700.99 per share! can you believe it? That’s an incredible gain of 1,792.52% in just 5 years!

If you had put $10,000 into NVIDIA in February 2019, when their shares were going for around $37.04, you could have picked up about 270 shares. Fast forward to today, NVIDIA shares are now priced at $700.99, the 270 shares you purchased for $10,000 would be worth an impressive $189,267! Pretty good for only 5 years, right?

Driving NVIDIA’s Meteoritic Rise

What factors drove NVIDIA’s incredible five-fold stock gain over the past 5 years? There are a few key reasons:

  • Revenue Growth: NVIDIA’s revenue grew from $10.9 billion in 2019 to approximately $27 billion in 2023. People are going crazy about their gaming chips, and their data center revenues are skyrocketing due to the increasing use of AI.
  • Profitability Surge: NVIDIA’s profits rose in tandem with its rapid revenue growth. Net income grew from $2.8 billion in 2019 to over $9.7 billion in 2022, and reach $4.3 billion in 2023. Their profit margins have also seen a significant increase.
  • Innovation Leadership: NVIDIA cemented its leadership in critical high-growth markets like gaming, data centers, AI, self-driving cars, and the metaverse. It brought a steady stream of innovative new products to market.
  • Secular Growth Trends: As gaming, AI, data centers, and the metaverse grew, NVIDIA was perfectly positioned to capitalize with its cutting-edge GPUs and platform. It rode multiple secular growth waves.

Overall, NVIDIA has seen strong secular tailwinds, continued technology leadership, and growing revenues over the past five years. This impressive combination drove its record-setting stock performance.

Now Take a Look on NVIDIA’s Financials Over the 5 Year Period

To find out the drivers behind NVIDIA’s stock rise, we need to take a deeper look at its financial statements over a five-year period.

NVIDIA’s income statement increased by 168% from $10.9 billion in 2019 to $29 billion in 2023, due to both the multi-fold growing gaming and data center segments. Software and services made up the bulk of revenue, pushing margins up from about 57% to 62% yesterday.

Operating income increased 48%, from $2.8 billion to $4.2 billion. At that time, cash levels on the balance sheet increased 208% from $10.9 billion to $3.4 billion, providing ample dry powder for investment.

According to the cash flow statement, operating cash flow increased 18% to $5.6 billion. Expansion expenses increased 3.7 times. NVIDIA spent $9.7 billion in 2023 on buybacks, reducing some debt by repurchasing shares.

NVIDIA’s financial performance over the past five years shows tremendous topline growth, consistent margin expansion, cautious investments and efficient capital allocation. Tremendous stock growth was supported by this successful financial formula.

The Road Ahead for NVIDIA

After NVIDIA’s parabolic stock performance over the past five years, what’s next? Analysts say much more can be done.

NVDA is well-positioned to benefit from long-term secular trends in gaming, data centers, AI, self-driving vehicles and metaphors. It continues to innovate with plans to release new products such as gaming GPUs this year. Higher taxes will be imposed on data center and automotive revenues over the next five years.

However, the stock is being hurt by slowing PC demand and the challenge of maintaining incredible growth. NVIDIA trades at approximately a 45x Forward P/E multiple.

NVIDIA is poised to deliver superior performance to the broader market, although the growth of the past five years may not be predictable.

The Key Takeaway

Ultimately, NVIDIA was one of the best stocks of the last five years. The stock achieved a life-changing return of 1,792.52 percent over this period, turning a $10,000 investment into nearly $190,000.

All of this was driven by fast-paced revenue growth, a rising market share, consumer market leadership and strong industry tailwinds.

For an enterprise with a higher risk tolerance, it can be great to get involved early to create innovations in larger enterprises. NVIDIA outlines long-term windfall profits.

Financial Statement (2020 – 2023) (IN USD THOUSANDS)

Financial Metric1/29/20231/30/20221/31/20211/26/2020
Total Revenue$26,974,000$26,914,000$16,675,000$10,918,000
Cost of Revenue$11,618,000$9,439,000$6,279,000$4,150,000
Gross Profit$15,356,000$17,475,000$10,396,000$6,768,000
Research and Development$7,339,000$5,268,000$3,924,000$2,829,000
Sales, General and Admin.$2,440,000$2,166,000$1,940,000$1,093,000
Operating Income$4,224,000$10,041,000$4,532,000$2,846,000
Add’l income/expense items$219,000$136,000$61,000$176,000
Earnings Before Interest and Tax$4,443,000$10,177,000$4,593,000$3,022,000
Interest Expense$262,000$236,000$184,000$52,000
Earnings Before Tax$4,181,000$9,941,000$4,409,000$2,970,000
Income Tax-$187,000$189,000$77,000$174,000
Net Income-Cont. Operations$4,368,000$9,752,000$4,332,000$2,796,000
Net Income$4,368,000$9,752,000$4,332,000$2,796,000
Net Income Applicable to Common Shareholders$4,368,000$9,752,000$4,332,000$2,796,000
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John Smith is a veteran stock trader with over 10 years of experience in the financial markets. He is a widely followed market commentator known for his astute analysis and accurate predictions. John has authored multiple bestselling books explaining complex market concepts in simple terms for novice investors looking to grow their wealth through strategic trading and long-term investments.
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