Nvidia’s incredible fundamentals, reflected in its soaring revenues and profits, have benefited its shareholders.
The chipmaker is the largest supplier of AI accelerators for data centers.
Nvidia (NASDAQ: NVDA) has deservedly gotten much attention in recent years thanks to its dominant position in the market for data center graphics processing units (GPUs). The business sells the high-end parallel processing chips that tech companies need to power artificial intelligence (AI) models. It's a legitimate pick-and-shovel investment play.
The stock has been a big winner, and not just since the AI trend took off. If you'd invested $100 in Nvidia 10 years ago and held on through the ups and downs that followed, here's how much your investment would be worth today.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Nvidia.
In the past decade, Nvidia shares have produced a monster total return of 22,980% (as of Dec. 19), which would have turned a $100 investment into a holding worth more than $23,000. The company does pay a small dividend, currently just $0.01 per share quarterly, that has had a tiny effect on investor gains.
Nvidia has crushed the S&P 500. The market's large-cap barometer had a 10-year total return of 305% -- not even remotely close to Nvidia's returns.
The chipmaker's shares have been lifted by its robust fundamentals. Revenue and net income skyrocketed by 4,285% and 12,867%, respectively, between its fiscal Q3 2016 and its fiscal Q3 2026 (which ended Oct. 26). Nvidia is now the world's most valuable company, sporting a market cap of $4.4 trillion.
Some investors fear that we're in an AI bubble. Should spending on AI infrastructure slow down, it could have a negative effect on Nvidia's impressive growth trajectory.
Before you buy stock in Nvidia, consider this:
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.