NVIDIA’s Journey: From Obscurity to a 3,000% Rise
If you could achieve a gain of over 1,000% in a stock, would you invest? Most investors would eagerly say “Yes!”
However, seeing such a significant return isn’t easy. Stock prices don’t climb in a straight line. To realize a profit of 1,000% or more, investors often face dramatic price fluctuations that can test their patience and nerves.
Let’s look at NVIDIA Corporation (NVDA) as a case in point.
In my 47 years in finance, NVIDIA has been my top performer, achieving over 3,000% growth since I recommended it in May 2019.
Today, I’ll revisit NVIDIA’s origins (which may be unknown to many outside the gaming community) and discuss a key moment that drew my attention to the company.
Furthermore, we’ll assess what impacted NVIDIA’s share price earlier this year and where the next growth may come from. While I believe NVIDIA still has plenty of potential, the upcoming chapter in AI development may not hinge on them alone.
The CEO of NVIDIA estimates there’s a $100 trillion opportunity in the market, and I have identified seven rising avenues to capitalize on it.
The Origins of My NVIDIA Recommendation
NVIDIA is a top company in computer graphics, best known for its graphics processing units (GPUs).
Initially, GPUs attracted only video game enthusiasts, but their capabilities extend far beyond gaming. They assist in various applications, from financial modeling to virtual reality, and even in the development of self-driving vehicles.
In the late 2010s, NVIDIA began receiving unexpected orders as both cryptocurrency miners sought high-performance GPUs and researchers in machine learning recognized their unique advantages.
GPUs excel at “parallelization,” breaking complex tasks into smaller, independent calculations completed simultaneously. This leads to speeds three times faster than traditional central processing units (CPUs) for machine-learning tasks, as noted by data storage provider Pure Storage.
This edge positioned NVIDIA favorably to benefit from the AI Boom, having amassed valuable patents and conducted extensive internal research.
My initial interest in NVIDIA stemmed from its involvement in autonomous driving technology. My son, an engineering student at Stanford, was involved in the debut of an autonomous racing vehicle named “Shelley,” which utilized NVIDIA chips.
In 2019, after learning about NVIDIA’s plans in artificial intelligence, I added the stock to my Buy List in the Growth Investor newsletter.
As mentioned, NVIDIA has since grown over 3,000%, although this journey was fraught with volatility.
A significant dip occurred on January 27, when NVIDIA shares plummeted 17%, translating into a staggering $589 billion loss in market capitalization—the largest single-day drop in history.
The cause? A Chinese AI firm called DeepSeek.
Here’s what happened.
Navigating Stock Setbacks
On January 20, DeepSeek launched its new AI model, R1, claiming it performed on par with U.S. AI models, including OpenAI’s o1-mini model for ChatGPT. The shocking aspect was that DeepSeek used NVIDIA’s outdated H800s chips compliant with Biden’s export restrictions.
Moreover, DeepSeek claimed it developed R1 in just two months, at a modest training cost of $5.6 million.
This announcement propelled DeepSeek to become the most downloaded app on the Apple Inc. (AAPL) App Store.
As news spread at the end of January, Wall Street reacted negatively, impacting AI stocks and the wider market. Concerns arose over the future of AI development and whether the U.S. tech sector could maintain its leading position.
- Cost Efficiency: If DeepSeek’s models rival those of American companies at reduced costs, it suggests U.S. developers overlooked something crucial.
- Reduced Hardware Usage: DeepSeek reported using far fewer chips for training compared to typical models, casting doubt on NVIDIA’s valuation and the need for additional infrastructure.
These factors raised apprehension about NVIDIA’s worth and the need for expanded data centers and power grids.
However, subsequent evaluations revealed that DeepSeek’s claims exaggerated its capabilities; the app reportedly crashes 99% of the time due to inadequate cloud capacity and a recent cyber attack.
Most importantly, the notion that DeepSeek could effectively utilize earlier NVIDIA chips while dismissing the need for new ones proved untrue.
With this knowledge, AI stocks rebounded, and NVDA surged by 11% in less than three weeks—a notable recovery for such a large entity.
To secure a 1,000% gain, investors should be prepared for volatility.
There will invariably be unsettling news, obstacles, and skepticism that could impact stock performance.
Nevertheless, fundamentally strong stocks—like NVIDIA—tend to make a comeback.
Looking Ahead to New Opportunities
I firmly believe NVIDIA will see further gains. In fact, I have labeled it the Stock of the Decade.
This stock has the potential to transform your financial outlook.
NVIDIA’s innovation is not just holding steady; it continues to accelerate.
Eventually, the technology within NVIDIA’s chips will reach atomic levels, addressing physical limitations. They may very well pivot to quantum computing when that time comes.
While that future is a way off, there’s an immediate catalyst I anticipate will help NVIDIA recover from its DeepSeek-induced losses and reach new heights.
This catalyst is the upcoming fourth-quarter earnings report scheduled for February 26. Analysts project earnings of $0.85 per share on revenue of $38.13 billion, reflecting substantial increases from the previous year. This translates to year-over-year earnings growth of 63.5% and revenue growth of 72.5%. Increased earnings estimates suggest a potential for a fifth straight earnings surprise.
NVIDIA has a track record of delivering good news at earnings announcements, so I expect positive results as we approach that date.
I will also be keen to hear insights from CEO Jensen Huang regarding what he describes as a $100 trillion opportunity…
This opportunity marks a pivotal moment in artificial intelligence, where technology begins to intersect more directly with everyday life—self-driving vehicles, fully automated factories, training robots, and even creating “digital twins” of cities.
This transition presents enormous potential. Investors who identify these trends now stand to reap significant rewards.
I refer to this stage as AI’s Crossover Moment, which could generate more wealth than any tech boom in history.
In this phase, AI evolves from a mere tool to a transformative force across various industries, infrastructure, and daily routines.
Consequently, the greatest profits likely won’t originate solely from NVIDIA’s technology or even from major tech firms.
My analysis has already identified seven lesser-known companies primed for significant growth as we navigate this $100 Trillion AI Crossover moment.
Find out more details NOW.
Sincerely,
Louis Navellier
Disclosure: As of the date of this email, I own the following securities mentioned in this analysis: NVIDIA Corporation (NVDA).
