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You’d be hard-pressed to find a company that has performed better recently than them Nvidia (NASDAQ: NVDA).
Last year, NVIDIA stock was one of the best-performing stocks in the S&P 500 and Nasdaq 100, returning 239%. This dominance continues in 2024 as it is up another 177% year to date.
The semiconductor company, which specializes in making artificial intelligence chips for large data centers, has reached another milestone this week When it became the most valuable company in the world, surpassing Microsoft (NASDAQ:MSFT) with a market value of $3.33 trillion.
Just a few weeks ago, Apple ( NASDAQ:AAPL ) raced to become second behind Microsoft.
Anyone who invested in NVIDIA during this historic period was certainly happy with the results, but the stock has been on a tear for more than a decade. Imagine how much you would have now if you had invested in NVIDIA 10 years ago. lets take alook.
NVIDIA stock is up 11% since the stock split
Evidence of NVIDIA’s tremendous rise is the fact that it has split its stock twice in the past three years. Companies typically do stock splits when their shares become expensive, lowering the entry price of the stock to make it more accessible to more investors.
On July 20, 2021, when NVIDIA stock was trading at about $751 per share, the company did a four-for-one split. Which brought the price down to about $187 per share.
However, NVIDIA was just getting started. This month, NVIDIA took things to another level and conducted a 10-for-1 stock split. The post-stock split price of $187 in 2021 has risen to more than $1,200 per share in just three years. The 10-for-one split completed on June 7 brought the price down to about $121 per share.
Since this latest split took effect, NVIDIA stock has risen another 11% to roughly $134 as of June 20. So far, it has returned about 177% on an adjusted split basis.
From $5,000 to $1.4 million in a decade
If you go back 10 years, long before the stock split in 2021, NVIDIA was trading at around $18 per share. If the stock had not split on those two occasions, the stock price would be astronomical right now.
That’s why it’s helpful to use online calculators to do the math for you, especially when it comes to stock splits.
So, if you had bought $5,000 worth of NVIDIA stock in June 2014, you would have had about 278 shares. After the four-for-one split and then the 10-for-one split, you would have over 11,000 shares of NVIDIA in total.
The stock you initially bought for $18 a share in 2014 would be worth a staggering $1.4 million today based on this morning’s price of about $127 a share (or an average annual return of 75.4% for 10 years).
This means 250 bags, which means the value of the stock has increased 250 times.
With the last stock After the split, investors have the opportunity to participate in the company’s next growth phase.
While replicating this kind of success over the next 10 years will be difficult, NVIDIA is an earnings juggernaut despite its high multiple. The company is also the dominant leader in its field, and we are just entering the era of artificial intelligence.
