You can't compile a list of the most successful stocks in history without including Nvidia (NASDAQ: NVDA)Since the company's initial public offering (IPO) in 1999, the stock has risen nearly 300,000%! Most of that gain came in the past 10 years, as the advent of cloud computing increased the importance of Nvidia's GPUs.
What really drove the stock, though, was the company’s dominance in AI chips. Demand for such chips has made Nvidia the leading chip company, leading to a 10-for-1 stock split earlier this year. Combine that with the above splits, and even the smallest Nvidia shareholders would have a significant position today.
Nvidia stock growth
Investors who bought one share of Nvidia stock at the IPO would own 480 shares today. The company’s stock has split 2-for-1 three times between 2000 and 2006 and 3-for-2 in 2007. No other splits occurred until the pandemic, when demand for Nvidia’s GPUs drove up the stock, leading to a 4-for-1 split. The AI chip revolution sent the stock soaring between late 2022 and today, leading to the aforementioned 10-for-1 split.
The financial gains were huge. One share at the IPO cost $12 before the six splits. Today, 480 shares are worth around $58,000. So even owning a token amount of Nvidia in 1999 would have generated staggering profits.
Putting Nvidia's growth into perspective
Ultimately, Nvidia demonstrates how owning a single stock can drive significant stock growth through splits.
Investors shouldn't expect one share of their growth stock to turn into 480 shares. However, if a company consistently grows its revenue and earnings in double digits, it's likely to split every few years.
It only takes seven 2-for-1 splits for a stock to grow to 128 shares, or it only takes two 10-for-1 splits for a stock to grow to 100 shares. These examples show how investing in a successful growth stock from the start can lead to exponential stock gains over time.