|Editor’s Note: Today, we’re looking into a company that got its start in the world of video games and made the jump into the wider world of tech. Most people scoff at the video game industry, but the global games market hit $120.1 billion in 2019 and more importantly they are a powerful gateway into the high-tech business sector. This is how a man named Howard got his start in the tech industry. He founded a company that made it into the Fortune 500 and had the chance to pay back his earliest investors 10,000x. Now this same world-class tech founder is starting up a whole new venture, and he’s sharing the details. My good friend and colleague, Neil Patel, is part of a special presentation to help fill you in. All you have to do is click here to check it out.|
It never ceases to amaze me just how lazy Wall Street analysts can be.
Maybe they’re more like Big Media than I had earlier imagined. In other words, the Street engages in groupthink. Oh yeah, and they often give us superficial analyses.
Here’s the thing; Wall Street largely wrote off a great chip firm as nothing more than a play on gaming.
Granted, it’s true that the company led the world in graphics chips that make computer games so much more immersive. And that market is nothing to sneeze at.
Forbes estimates the global computer gaming market will be worth $196 billion three years from now.
But hiding beneath that surface was the chance to become a millionaire with a firm that has since moved into AI, self-driving cars, and virtual reality.
Starting from September 27, 1999, until February 19 of this year when the stock reached its high point of $314.70, it’s gone up in value by a whopping 19,692%.
The New Computing Dimension
Now then, there’s a good reason why I bash on Wall Street. In my 35 years of knocking around Silicon Valley, I’ve seen the Street hype hopeless laggards and miss some real winners.
Indeed, if you knew anything about tech at all, then it would be obvious that this firm’s graphical processing units (GPU) had several other applications beyond just gaming.
And that is just what this high-octane leader did. With a crackerjack CEO at the helm, the company has moved into virtual reality, AI, connected and self-driving cars, along with virtual reality.
That gives us access to sectors that by the end of this decade will be worth another roughly $640 billion. And that’s on top of the $196 billion that the gaming market will be worth by 2022 according to Forbes.
No wonder Wall Street has finally woken up to the huge potential behind NVIDIA Corp. (NVDA). This helps explain why the bulk of its millionaire-making run occurred after today’s bull market began back in March of 2009.
Founded in 1993, it set up shop as a straight-up play on computer gaming. The idea was to make specialized chips that could convert PCs into de facto advanced gaming consoles.
The big breakthrough came just six years later when the firm launched the first GPU. This was literal game-changing technology. It was a single chip that also contained mathematical drivers for rendering moving images with dazzling detail.
It had the ability to render 10 million shapes and images every single second of operation. Today, the successor GPU can handle 7 billion per second, for an increase of roughly 69,900%.
A Money Multiplying Trend
Now you know why Nvidia’s devices have found their way into other platforms that need speed and the ability to perform a massive number of calculations.
I’ll give you more details about the company’s tech and operation in our follow up chat.
For now, I want to address the fundamental investment thesis here. Simply stated, Nvidia is a great example of why you have to put your money into tech – that is if you really want to grow your wealth.
Because it’s the fountain of innovation, tech is the one area where you only need to invest in a handful of stocks to become a millionaire. And sometimes, all it takes is a single stock.
Nvidia went public on January 22, 1999. I picked a reference date nine months later because new stocks usually sell off after the first six months of trading.
So, if we start keeping track on September 27, 1999, the stock was trading at $1.59 a share. From then until its recent all-time closing high of $314.70 on February 19, it went up in value by a whopping 19,692%.
That’s enough to turn $10,000 into $1.98 million. But don’t worry, I still see plenty of upside ahead.
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%.
I’ll walk through it all in our follow-up chat. Stay tuned, you won’t want to miss it.
Cheers and good investing,
Michael A. Robinson
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