When we spoke on February 25, I noted how important it is to go behind the headlines if you want to score big gains on the wealth machine that is high tech.
That rule says to “separate the signal from the noise.” And it really comes into play with a great stock like NVIDIA Corp. (NVDA).
The fact is, for years Wall Street and the media wrote this company off as nothing more than a play on computer gaming.
But the reason the stock has racked up amazing gains approaching 20,000% is because this company is so much more dynamic than that.
Its robust, high-speed chips are finding their ways into advanced autos, AI, and more.
The Road to Future Growth
Now then, in our first chat about Nvidia, I noted that on September 27, 1999, roughly nine months after the IPO, this stock cost $1.59 a share.
From then until its recent high of $314.70 on February 19, it had gone up by19,692%.
That’s enough to turn $10,000 into $1.98 million.
The Silicon Valley firm launched in 1993 as a chip firm specializing in devices that could turn PCs into gaming consoles. From those humble beginnings, we have seen the rise of a high-octane firm with a market cap of roughly $179 billion.
Nvidia went public back in 1999. That same year, the firm unveiled the graphic processing chip, known as a GPU. Offering very advanced graphics, it took the gaming market by storm.
It’s now being used to drive some of the hottest sectors in tech today.
Let’s start with autonomous cars. They are the future of the auto sector. Nvidia is there to help and offers us a strong hook in a massive market.
Allied Market Research says that the global market for autonomous vehicles will be worth $54.2 billion next year. Just seven years out, that figure will increase to $556.6 billion, growing at 40% a year.
In recent years, a sprawling team of engineers has been refining the Nvidia Drive AGX platform. It’s a scalable, open computing platform that serves as the brain for autonomous vehicles.
German auto giant Volkswagen AG (VLKAF) says it plans to outsource all of its autonomous driving work to Nvidia. Other automakers such as Audi and AB Volvo (publ) (VOLVF) are also in late-stage advanced car development with Nvidia.
Turns out, driverless cars are closely related to another very hot tech sector for Nvidia – AI.
Mercedes-Benz, for example, has already rolled out an NVIDIA-powered AI cockpit. It’s part of the Mercedes-Benz User Experience – or “MBUX” – infotainment system. The platform uses real-time 3D graphics and artificial intelligence powered by Nvidia.
A Lucrative Sector
AI isn’t just for the auto sector. Companies all over the world are building AI into their products and services as well as into backend platforms that improve productivity and profit margins.
Accenture says that by 2035, AI can double economic growth in the 12 most advanced economies that now have a total value of $61 trillion.
Now you know why I say there’s so much upside still ahead for Nvidia. Over the past three years, NVDA has grown its per-share earnings by 27%. At that rate, they will double in just over 2.5 years.
So, that means we can project that a little more than five years from now, we will see two more doubles, or additional gains of 300%.
At that rate, that original $10,000 stake from 1999 will be worth $7.92 million!
But don’t let that staggering sum from the past warn you off of this stock. Gains of 300% in five years would absolutely crush the broad market and greatly help your retirement account.
As I like to remind folks… tech is the one place where you can consistently find that a handful of stocks can make you a millionaire.
And sometimes, as Nvidia proves, all you need is one great tech stock.
Of course, if everyone wants to get in on the kinds of companies that could each become the next Nvidia, I can help you with that too. After all, great tech stocks can give you steady, market crushing gains, but typically the highest profit margins are made off of pre-IPO investments.
Of course, these kinds of deals that were once closed to the public, and they can be extremely risky.
That’s where a good friend and colleague of mine, Neil Patel, comes in.
He’s interviewing a veteran Fortune 500 founder named Howard, who once made enough money on a new venture that it could have paid back his earliest investors 10,000X.
Just click here to see a special presentation all about his latest project, that is an exciting pre-IPO investment opportunity that you’ve likely never seen before.
Cheers and good investing,
Michael A. Robinson