Investing $1,000 in Each of These 3 Stocks 20 Years Ago Would Have Created a Portfolio Worth $674,000 Today

Investing in a wide range of growth stocks can be an effective way for investors to generate significant returns in the future. That's because it's not always obvious which stock will do well when looking at the long term. A lot can change. This is why investing in many different stocks can be a far better idea than investing in just a few stocks that may seem promising today.

Nvidia (NASDAQ:NVDA), Netflix (NASDAQ:NFLX), and Amazon (NASDAQ:AMZN) are all iconic companies, and investing $1,000 in each of them 20 years ago would have produced life-changing gains. Here's how much each of those investments would be worth now (returns as of Oct. 26), why they've done well, and why these growth stocks can still be good buys today.

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Nvidia: $383,000

A $1,000 investment in chipmaker Nvidia back in October 2006 would be worth approximately $383,000 today. What's remarkable, however, is that the lion's share of those gains has taken place in just the past couple of years, with the emergence of generative artificial intelligence (AI) and Nvidia's chips being critical for many companies looking to build out the necessary tech infrastructure they need to take advantage of opportunities related to AI.

Nvidia's growth has been exceptional, with its operating profit totaling nearly $200 billion over the past four quarters. Just a few years ago, it was less than half that level. At around $5.3 trillion in market cap, Nvidia is now the most valuable company on U.S. markets, due to its dominance in the chip space.

For growth investors who want exposure to AI, it's hard to go wrong with Nvidia. Its financials are incredibly strong, and given its significant profits, it's still trading at only 28 times its trailing earnings, which is a very reasonable multiple for the growth the business has generated and the massive opportunities it still possesses.

Netflix: $161,000

Over 20 years, Netflix's stock would have turned a $1,000 investment into more than $161,000. The company has transformed the way people watch TV shows and movies. Consumers can watch a wide range of content on their TVs, phones, or tablets without needing cable. Netflix has also found a way to generate strong margins while giving consumers plenty of value. It has succeeded where other streaming companies have struggled mightily.

This year, the stock has been falling due to concerns about slowing growth. But for a business that has shown a strong ability to innovate and adapt to changing market conditions and opportunities, Netflix isn't a stock I'd bet against.

The company has shown it can produce strong content, and investments in live sports could make its platform the one consumers ultimately can't do without. With its stock trading near its 52-week low, now can be an opportune time to invest in Netflix's amazing business.

Amazon: $130,000

Amazon has revolutionized the way people shop, with its e-commerce site offering a wide range of products and fast delivery, making it a viable option for consumers who don't want to wait too long for their purchases. Next-day delivery has effectively become the norm for most Amazon shoppers, and the company continues to improve, now offering even one-hour delivery in many markets.

The business has grown significantly and become vastly more profitable. Last year, it generated $80 billion in operating income -- more than six times the $12 billion it reported just three years earlier. With plenty of growth opportunities still ahead in e-commerce, plus its cloud business, Amazon Web Services, there is still much more upside for the stock. Buying it now, with it trading at around 20 times its trailing earnings, could prove to be a brilliant move in the future.

Although Amazon has produced the lowest returns on this list, it's still performed incredibly well over the past two decades. An investment of $1,000 into this top tech stock 20 years ago would now be worth around $130,000. That means combined, if someone were to invest $1,000 in each of these stocks 20 years ago, the value of those investments would now be worth around $674,000.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Netflix, and Nvidia. The Motley Fool has a disclosure policy.