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AU Financial Review
29-05-2025
- Business
- AU Financial Review
Nvidia built its culture around 1 principle. And it saved the company
On a chilly, overcast day in February 1993, three men huddled around a booth in a Denny's restaurant in San Jose, California. It was Jensen Huang's 30th birthday. As he and his fellow co-founders, Chris Malachowsky and Curtis Priem, signed the founding documents for their new company, they ordered Super Bird sandwiches and bottomless coffee. They chose to call their new company Nvidia, after the Latin word for envy, and decided the corporate colours would be green. The trio of electrical engineers had every reason to be confident. Each had a stellar reputation within the electronics industry, and with $2 million in seed funding secured, they were primed for success. But the journey ahead would be far more treacherous than any of them anticipated.
Daily Mail
28-05-2025
- Business
- Daily Mail
How much would you be worth if you'd invested in Nvidia? What £10,000 of shares bought at different points is worth now
Investors who bought into Nvidia decades ago are sitting on huge gains as our analysis highlights just how huge the tech firm has become. The artificial intelligence chipmaker went public via an initial public offering in January 1999 at $12 per share. Nvidia has been on the market for over 26 years and its shares are up around 338,650 per cent since its first-day closing price. According to a 2024 analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University, since its IPO in 1999 through to December 2020, Nvidia shares created $309.4billion in shareholder wealth. In his research paper, Bessembinder, said: 'The highest annualized compound return for any stock with at least 20 years of return data was 33.38 per cent, earned by Nvidia shareholders.' Russ Mould, investment director at AJ Bell, analyses how much someone would be worth if they each purchased £10,000 worth of shares at different points in the company's history. Four of the five years selected feature in Nvidia's key history timeline on its website. One date, 12 October 2022, saw Nvidia shares fall sharply. If you purchased £10,000 of Nvidia shares in 1999 Nvidia was founded by Jensen Huang and fellow engineers Chris Malachowsky and Curtis Priem. The trio wanted to design a chip that would enable realistic 3D graphics on personal computers. The co-founders believed graphics could be enhanced if powered by a specialist electronic circuit known as a graphics processing unit, or GPU. Nvidia first launched in 1993, but its initial public offering took place in the US in 1999. Its first GPU also hit the market in 1999. In 2000, Nvidia became the supplier of graphics processors for Microsoft's Xbox gaming console. Shareholder returns: An early investor in Nvidia who purchased £10,000 worth of shares in the business on 22 January 1999, the date of the IPO, would have seen the capital gain on their shares rise by 360,120 per cent to £33,048,780 to date, Mould said. The total return is up 350,120 per cent to £36,021,980. Total returns take into account not only the increases and falls in the prices of the shares owned, but also the value of any payouts received, namely dividends. If you purchased £10,000 of Nvidia shares in 2006 In 2006, the group unveiled Nvidia CUDA technology, a new architecture for computing on Nvidia GPUs. CUDA stands for Compute Unified Device Architecture. The CUDA computing platform made it easier for developers to create complex programs. Early versions were focused on streamlining video game effects, like helping create realistic smoke effects or building debris. Shareholder returns: Someone who invested £10,000 in Nvidia on 27 May 2006 would have seen their capital return grow 33,817 per cent to £3,391,740 to date. The total return is up 36,822 per cent to £3,698.203, Mould added. If you purchased £10,000 of Nvidia shares in 2012 As Nvidia grew, it started to shift its focus towards developing hardware and software for high-performance computing, which would be focused on AI. In 2012, Nvidia launched the AlexNet neural network, which the group claimed would lead to a breakthrough in the era of modern AI and better power efficiency. Shareholder returns: An investor who snapped up £10,000 worth of shares on 27 May 2012 have seen their capital gain surge 43,610 per cent to £4,370,968 to date. The total return on a £10,000 2012 investment is up 47,559 per cent to £4,765,884. If you purchased £10,000 of Nvidia shares in 2018 In 2018, Nvidia unveiled the GeForce RTX series, the first gaming GPUs based on Nvidia's Turing architecture and its RTX platform. The developments improved graphics rendering and further AI integration, according to industry experts. Shareholder returns: Someone who purchased £10,000 worth of shares on 27 May 2018 would have seen their capital gain rise by 2,074 per cent to £217,426 to date. The total return on a £10,000 investment in Nvidia shares on 27 May 2018 is currently up 2,096 per cent to £219,950. If you purchased £10,000 of Nvidia shares in 2022 Nvidia has been one of the standout stars in the AI boom amid rising demand sparked by the success of OpenAI's ChatGPT in 2022. In 2022, the business launched the Nvidia Omniverse Platform, which enabled game developers, film makers and other creative professionals to work within a 3D metaverse. However, not everything has been plain-sailing. On 7 October 2022, the US Department of Commerce unveiled strict restrictions on the sale of semiconductors and equipment to China. Nvidia'a share price closed at a low of $11.49 on 12 October 2022. Shareholder returns: An investor who snapped up £10,000 worth of shares on 12 October 2022 would have seen a capital return increase of 1,078 per cent to £117,826 to date. The total return on a £1,000 investment in Nvidia shares since 12 October 2022 is currently up 1,080 per cent, at £117,950, Mould told This is Money. Nvidia shareholder returns from five different years Capital gain Total return £10,000 invested £10,000 invested Since IPO on 22 Jan 1999 330388% 360120% £33,048,780 £36,021,980 Since 27 May 2006 33817% 36882% £3,391,740 £3,698,203 Since 27 May 2012 43610% 47559% £4,370,968 £4,765,884 Since 27 May 2018 2074% 2096% £217,426 £219,551 Since 12 Oct 2022 1078% 1080% £117,826 £117,950 Source: LSEG Refinitiv data Are Nvidia shares still worth buying? Nvidia started off as a video games chipset expert and by good fortune it turned out its graphics chips are ideal for AI. In terms of whether the group's shares remain appealing, Mould told This is Money: 'It still looks well placed, but investors do need to ask themselves if 33x this year's earnings and 25x next still represents value and levels which offer both downside protection if anything goes unexpectedly wrong and upside potential if things go right – and that covers both company-specific issues. 'This could encompass both company-specific issues like competition and technology changes, wider market issues like an unexpected stock market downturn and broader economic issues including tariffs. 'The DeepSeek challenge to the AI narrative of more chipsets, more servers and more computing power is yet to be addressed, as the R1 LLM launch challenges all three of those core preconceptions, but only time will tell if investors need to be worried or not.' Shares in Nvidia cratered in January 2025, losing almost £500billion in one day, after Chinese start-up DeepSeek developed a free-to-use AI model that it claimed can compete with US rivals such as Chat GPT for a fraction of the cost. Mould urges would-be investors to be cautious of historic returns figures. He said: 'One final observation is that while the historic returns are very beguiling, they are no guide to the future – and that is especially the case for a company with a $3trillion stock market capitalisation, a figure not too far from the entire GDP of the UK. 'One definition of a stock market bubble – but by no means the only one – is that investors continue to expect the same rate of return in the future, even if the spectacular returns of the past mean the valuation is already very high, and so, so much higher than it was. 'As Warren Buffett once observed in his 1989 letter to Berkshire Hathaway shareholders: 'In a finite world, high growth rates must self-destruct. If the base from which the growth is taking place is tiny, this law may not operate for a time. 'But when the base balloons, the party ends: A high growth rate eventually forges its own anchor. 'It may behoove anyone choosing to research Nvidia further, let alone buy the shares, to bear that in mind when they look at the historic progression in the company's sales, profits and cash flow, as well as the capital and total return from its shares.' Nvidia's colossal financials Insatiable demand on the part of AI companies for Nvidia's GPUs propelled Nvidia's stock past $1trillion in market capitalisation in the middle of 2023. Last year, Nvidia became the fastest company to go from $2trillion to $3trillion in market value. In its quarterly results to the end of October 2024, the group's earnings doubled to $0.81 per share, while revenue grew 94 per cent to a record $35.1billion. 'Nvidia is currently the second-largest company by stock market capitalisation in the world, behind only Microsoft', Mould said. Mould said: 'Nvidia did offer fairly cautious guidance for the first quarter, which runs from February to April, but it has had the happy knack of beating estimates for the quarter, even if some are tempted to accuse chief executive Jensen Huang of intentionally sandbagging the numbers, so he can deliver the expected, even required, upside surprise. 'Either way, the first-quarter number will be benchmarked against the guidance given by Mr Huang alongside the full-year results back in February. 'Just as important will be any guidance for the second quarter, which runs from May through to July. 'For the first quarter, Nvidia has sales to $43million, some 70 per cent above the $22.1billion achieved in the same period a year ago. The analysts' consensus for the second quarter is $45.4billion.' Nvidia is working to offset revenue losses in China following a US government ban on exports of its H20 chip. The company has said it expects to incur $5.5billion in charges related to the ban. This month it emerged that some of Nvidia's key partners, including the likes of Dell and Wistron, are accelerating production of its flagship AI data centre 'racks' following a resolution of technical problems which had delayed shipments. Nvidia's latest quarterly earnings will be published later today (Wednesday 28 May).
Yahoo
28-01-2025
- Business
- Yahoo
Nvidia stock among top Florida Google searches. What's its 2025 forecast, Deepseek's impact
Nvidia stock ranked among the top Google searches of 2024, driven by its innovations in AI, graphics processing, and semiconductors. Nvidia's technological advancements have made it a key player in industries like gaming and autonomous vehicles, attracting both tech enthusiasts and investors. Its rising prominence reflects its growing influence in shaping the future of technology. Nvidia is at the top of the news again this month after a new AI model DeepSeek was released, offering a low-cost alternative to U.S. developments like ChatGPT while using less powerful chips. The increased competition has sparked concerns, causing Nvidia's biggest stock drop since COVID-19. Nvidia is a leading tech company known for designing graphics processing units (GPUs) and advanced chips for gaming, artificial intelligence, and professional markets. Its chips power high-performance gaming systems, AI-driven applications, self-driving cars, and data centers. Nvidia also develops software and platforms that enhance machine learning, simulation, and digital content creation, making it a key player in shaping the future of technology across various industries. Nvidia is an American company, founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem in Santa Clara, California. Initially, it focused on creating graphics processing units (GPUs) for the gaming industry. Nvidia's future is uncertain after its stock dropped by 17% on Monday — the largest one-day drop since COVID-19's arrival in 2020 — slashing more than $595 billion from the company's valuation, CNBC reported. This came after Chinese AI company DeepSeek released its R1 model, a similar AI app to ChatGPT, created and launched for less than $6 million, while American competitors spend hundreds of millions on comparable apps, reported by Investopedia. The R1 model matches the capacity of OpenAI and Google Gemini but uses fewer, less powerful chips, sparking investor concerns about the future of highly valued U.S. tech stocks. Nvidia shares rose 5% on Tuesday, rebounding slightly from Monday's historic loss. The Wall Street endorsements, however, failed to lift the stock. Nvidia stocks are now down 23% from an all-time high reached earlier this month, as reported by CNBC. Diamond Walker is a journalist at The Palm Beach Post, part of the USA TODAY Florida Network. You can reach her at dkwalker@ Help support our journalism. Subscribe today This article originally appeared on Palm Beach Post: Nvidia stock and DeepSeek AI impact: What it holds for investors
