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Nvidia has been a cash cow for investors lucky enough to buy in ahead of the AI-driven rally.
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The company’s shares have risen 1,500% since 2019 as its GPUs power the AI revolution.
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Early retail investors told Business Insider that they used their winnings to finance cars, vacations and dream homes.
The dizzying rise of Nvidia stock in recent years has brought extraordinary gains to many retail investors, especially those who got in before the chipmaker became an artificial intelligence superpower.
The stock’s steep rise — up more than 1,500% since 2019 — has changed the lives of some of Nvidia’s long-term retail investors, leading to more comfortable retirements, new cars and millions of dollars in profits for some.
Business Insider reviewed brokerage and account statements to verify the profits and account balances of the investors it spoke with. Some of them asked to be identified only by their first names to protect their privacy.
Tom, a 48-year-old retail investor from New Jersey, first bought Nvidia in 2011, when the stock was worth just about $5 per share. He invested $12,000 then and another $50,000 in 2022. His total stake is now $3 million.
His wealth, which remains largely invested and untouched, is a matter of research and timing, he said.
“They were the original creators of GPUs,” he said. “I’m not even much of a techie. 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 stock rose as gamers, with time on their hands due to COVID-19 lockdowns, rushed to upgrade their computers with the latest Nvidia GPUs.
Then, in November 2022, the debut of OpenAI’s ChatGPT fueled a stunning growth trajectory for Nvidia, as its GPUs were the only options when it came to powering such AI programs. The stock has essentially gone parabolic since then.
According to Vanda Research, Nvidia has become the top stock among retail investors, outperforming the portfolio concentrations of Apple, Tesla and SPY, the most popular S&P 500 exchange-traded fund.
Tom said that his Nvidia share was worth about three times what he had in his 401(k) account and that he felt more confident that he could live well in retirement – a concern that had been on his mind before he chose Nvidia.
Generational wealth
Kiana Danial is the 40-year-old founder of Invest Diva, a company that helps women take control of their financial future and create generational wealth.
Danial had never heard of Nvidia before 2015, when she married her husband, who was a gamer in his spare time. Danial said she likes investing in products she uses, but when she heard her husband talking about how much he loved Nvidia, she decided to buy the stock.
She first bought Nvidia in June 2016. She bought 10 shares and was soon placing new buy orders every month.
“Investments started growing pretty quickly,” Danial said.
Nvidia shares fell more than 30% in 2018. During this time, Danial continued to expand 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 home.
Danial sold 800 shares in six weeks for about $188,795, reducing her total shares to 323.
“I’m obviously upset with myself,” Danial said of selling the stock. “But we bought our dream home and it’s beautiful.”
The shares she still owns have given her a profit of $202,940. She doesn’t plan to sell her shares any time soon, but wants to buy more.
Danial’s daughter recently turned 6 and the account Danial set up for her has grown 568% and is worth around $11,000.
The investors Business Insider spoke to chose 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 virtually no competition.
The company’s dominance has made it difficult to find anyone willing to echo the negative view, although some analysts have recently expressed more hesitation about further gains following the stock’s meteoric rally.
New financial security
Rick, a 36-year-old retail investor from Texas, started buying Nvidia in 2009. The stock caught his attention because the company was considered the future of gaming at the time. He invested $600 in what he called a wildcard bet.
“And so $600 became $140,000,” Rick said.
With Nvidia, Rick said he felt like he had a safety net to fall back on. So far, he’s only spent a small portion of his winnings: $15,000 to flip a car he’s been working on, a hobby he never would have pursued without Nvidia’s money. To celebrate his 10th anniversary, he and his wife packed their bags for a $14,000 vacation to Costa Rica.
“I wasn’t stressed at all. I thought, ‘We can spend as much as we want on this trip,'” he said.
The feeling of security that such a windfall provides was the main theme of the Nvidia investors with whom BI was associated.
It’s a similar story for Chris Downs, a 66-year-old who lives in rural Missouri and left his job as a math teacher three years ago.
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 COVID-19 quarantine. Downs said he picked up an Nvidia graphics card for his setup and was impressed.
He bought 112 shares in March 2020 for $79 each.
In July 2023, he sold 28 Nvidia shares at $436 apiece to offset losses from other investments. He now has 84 shares, among other stocks, worth over $65,000 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 wasn’t lavish, but he tried to travel every month. He has been to Bolivia, Paris and Mexico City, among other places, and plans to travel to Spain at the end of April.
He said security was the biggest benefit of his investment and he knew he could cover any unforeseen financial mishaps.
“It’s nice not to have to worry in retirement,” Downs said.
Read the original article on Business Insider