It is impossible to create a list of the most successful stocks in history without mentioning Nvidia ( NVDA 4.35% ) . Following the company’s first time offering its shares to the public ( IPO Since 1999, the stock has surged by almost 300,000%, with the bulk of this growth taking place in the past decade due to the rise of cloud computing, which has heightened the significance of Nvidia’s GPUs.
Nevertheless, the company’s stock received a significant boost due to its strong position in AI chip technology. The high demand for these chips has propelled Nvidia to the forefront of the chip industry, resulting in a 10-fold increase in its value. stock split At the beginning of this year, taking into account previous stock divisions, even the least significant shareholders of Nvidia would now hold a considerable amount of shares.
The increase in Nvidia’s market share.
Investors who purchased a single share of Nvidia stock during its initial public offering would now have 480 shares. The stock experienced two 2-for-1 splits and one 3-for-2 split between 2000 and 2007. There were no further splits until the pandemic, which resulted in a 4-for-1 split due to increased demand for Nvidia’s GPUs. The rise of the AI chip industry caused a significant increase in Nvidia’s shares from late 2022 onwards, leading to a subsequent 10-for-1 split.
The profits were substantial. Initially, one share was priced at $12 during the IPO, before undergoing six splits. Currently, owning 480 shares amounts to approximately $58,000. Therefore, having even a small number of Nvidia shares in 1999 would have resulted in remarkable profits.
Examining Nvidia’s expansion in context
In the end, Nvidia demonstrates that owning just one share can lead to significant share growth through stock splits.
Investors should not anticipate that one share of their growth stocks will multiply to 480 shares. However, if a company consistently increases its revenue and profits by double digits, it is probable that it will undergo a stock split every few years.
Just seven 2-for-1 splits can result in an increase from one share to 128 shares, while only two 10-for-1 splits are needed to transform one share into 100. These instances demonstrate the potential for significant share growth by investing in a promising growth stock at an early stage.
