The Slave Vlasic/Getty Images; Chelsea Jia Feng/BI
Nvidia has been a cash cow for investors lucky enough to get in ahead of the AI-driven rally.
The company’s shares have gained 1,500 percent since 2019 as its graphics processors power the AI revolution.
Early retail investors told Business Insider that they used their winnings to pay for cars, vacations and dream homes.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
The dizzying rise of Nvidia stock in recent years has brought extraordinary profits to many retail investors. Especially those who got in before the chip maker became an artificial intelligence superpower.
The stock’s steep rise — over 1,500 percent since 2019 — has changed the lives of some of Nvidia’s long-term retail investors. For some, that meant more comfortable pensions, new cars and millions in winnings.
Business Insider reviewed brokerage and account statements to verify the profits and account balances of the investors it spoke with. Some of them only want to be identified by their first names to protect their privacy.
Read too
Are bonds better stocks? This is what a Blackrock manager says
Nvidia: from gaming icon to AI superpower
Tom, a 48-year-old small investor from New Jersey, first bought Nvidia in 2011, when the stock was valued at just five US dollars (just under 4.7 euros). At that time he invested 12,000 US dollars (11,200 euros) and in 2022 another 50,000 US dollars (almost 47,000 euros). His total share is now worth three million US dollars (2.8 million euros).
His fortune, most of which is invested and remains untouched, was a matter of research and good timing, he said.
“They were the original inventors of GPUs,” he said. “I’m not even much of a technician. I’m not a computer person at all, but I knew the GPUs would be worth something one day.”
Nvidia has gone from gaming icon to AI superpower seemingly overnight. In the early days of the pandemic, the company’s shares rose as gamers, running out of time due to coronavirus lockdowns, upgraded their computers with the latest Nvidia GPUs.
Then, in November 2022, the debut of OpenAI’s ChatGPT fueled stunning growth in Nvidia stock, as Nvidia’s graphics processors were the only company in town that could power such AI programs. Since then, the stock has essentially risen parabolically.
According to data from Vanda Research, Nvidia is now the top stock among retail investors, surpassing the portfolio concentrations of Apple, Tesla and SPY, the most popular S&P 500 exchange-traded fund.
External content not available
Do you have a contentpass subscription but still don’t want to miss out on displaying external content from third-party providers? Then click on “agree” and we will integrate external content and services from selected third-party providers into our offer to improve your user experience. You can view a current list of these third parties at any time in your privacy (link to privacy). In this context, usage profiles (including based on cookie IDs) can also be created and enriched, even outside the EEA. In this case, your consent also includes the transfer of certain personal data to third countries, including the USA in accordance with Article 49 Paragraph 1 Letter a) GDPR. Further details on data processing can be found in our data protection information and privacy policy, which are available at any time in the footer of our offer. You can exercise your consent to the integration of external content at any time in the footer of our offer via the “Revocation Tracking” link.
Agree and view external content
Tom said his Nvidia holding is worth about three times as much as his 401(k) balance and that he feels more confident about living well in retirement. This is a concern that worried him before he joined Nvidia.
Read too
Finanzfluss founder Thomas Kehl: This is how I would invest today if I had to start from scratch
Generational prosperity
Kiana Danial is the 40-year-old founder of Invest Diva. This is a company that helps women take control of their financial future and build wealth across generations.
Danial had never heard of Nvidia before 2015, when she married her husband, who is a gamer in his free time. Danial said she likes to invest in products that she uses herself. When she heard how much her husband was raving about Nvidia, she decided to buy the stock.
She first bought Nvidia in June 2016. She bought ten shares and shortly thereafter placed new buy orders every month. “Investments started growing pretty quickly,” Danial said.
Nvidia shares fell more than 30 percent in 2018. During this time, Danial continued to add to her positions and began adding Nvidia to her Roth IRA and a Roth IRA she had set up for her daughter.
Danial sold most of her shares in February and March 2023 to partially cover a large down payment on a second house.
The pool at Kiana Danial’s house. Their Nvidia investments helped finance a down payment. Jeff Roberts Photography
Nvidia shares are popular — there is virtually no competition
Danial sold 800 shares for around $188,795 (around €176,000) within six weeks. This reduced their total number of shares to 323.
“Of course I blame myself,” Danial said about selling the shares. “But we bought our dream home, and it’s beautiful.”
The shares she still owns have earned her a profit of $202,940 (just over €189,000). She has no plans to sell her shares any time soon and intends to purchase more.
Danial’s daughter recently turned six. The account Danial set up for her has grown by 568 percent. It is now worth around $11,000 (almost €10,300).
The investors Business Insider spoke to jumped on Nvidia early on because of the company’s reputation among PC gamers. But today, the company’s chips are the linchpin of the AI revolution. And there is practically no competition.
The company’s dominance has made it hard to find anyone willing to play the bear trap, although some analysts are following the stock’s meteoric rise become more hesitant lately are as far as further profits are concerned.
Read too
Competitors and cousins: The two CEOs of rival chip giants Nvidia and AMD are apparently related
New financial security
Rick, a 36-year-old retail investor from Texas, started buying Nvidia in 2009. The stock caught his eye because the company was considered the future of the gaming industry at the time. He invested $600 (€560), which he described as a wild bet.
“And so $600 became $140,000,” Rick said. (That’s about 130,000 euros.)
With Nvidia, Rick felt like he had a safety net to fall back on. He has only spent a small portion of his winnings so far. $15,000 (14,000 euros) to repair a car he worked on. It’s a hobby he wouldn’t have started without the Nvidia money. For his tenth anniversary, he and his wife packed their bags for a $14,000 vacation to Costa Rica.
“I didn’t have any stress about it at all. We can spend as much as we want on this trip,” he says.
This feeling of security that such a windfall provides was the main theme among the Nvidia investors that BI contacted.
Read too
Why Super Micro shares plunged 23 percent, taking AI darling Nvidia with it
Travel every month thanks to Nvidia shares
Chris Downs, a 66-year-old living in rural Missouri who left his job as a math teacher three years ago, had a similar experience.
He’s been investing for some time, but his interest in Nvidia began when he bought a new computer for video editing at the start of the coronavirus quarantine. Downs said he picked up an Nvidia graphics card for his system and was impressed.
He bought 112 shares in March 2020 for $79 each (almost 74 euros).
In July 2023, he sold 28 Nvidia shares at a price of $436 (407 euros) each to offset losses from other investments. Now, among other stocks, he still has 84 shares worth over $65,000 (just under €60,600), based on Monday’s prices.
He said he would likely sell some of his Nvidia shares shortly before the election. But he plans to invest the proceeds for his four children, just as his parents and grandparents did for their children.
Downs said his lifestyle isn’t lavish, but he tries to travel every month. Places he has been to include Bolivia, Paris and Mexico City. He is planning a trip to Spain at the end of April.
He cites the security and peace of mind of being able to cover unforeseeable financial mishaps as the biggest benefit of his investment. “It’s nice not to have to worry in retirement,” Downs explains.
External content not available
Do you have a contentpass subscription but still don’t want to miss out on displaying external content from third-party providers? Then click on “agree” and we will integrate external content and services from selected third-party providers into our offer to improve your user experience. You can view a current list of these third parties at any time in your privacy (link to privacy). In this context, usage profiles (including based on cookie IDs) can also be created and enriched, even outside the EEA. In this case, your consent also includes the transfer of certain personal data to third countries, including the USA in accordance with Article 49 Paragraph 1 Letter a) GDPR. Further details on data processing can be found in our data protection information and privacy policy, which are available at any time in the footer of our offer. You can exercise your consent to the integration of external content at any time in the footer of our offer via the “Revocation Tracking” link.
Agree and view external content