Diverting a $10,000 Investment into These 3 Expansion Stocks a Decade Ago Would Have Amassed a $3.4 Million Fortune Now
Diving into the world of investing, it's easy to get caught up in the allure of those predict-the-future stocks that might double or triple in value within a few years. However, the real magic often happens over an extended period. That's why diversifying your portfolio by investing in multiple stocks can be an excellent strategy. It's practically impossible to foresee where a business might end up in the long run, but if you strike it rich with a few, it can more than compensate for less impressive performances in other areas of your investment portfolio.
Three stars from the past decade shine brightly as examples of top growth stocks: Nvidia (NVDA), Advanced Micro Devices (AMD), and Tesla (TSLA). If you'd invested $10,000 in each of these companies a decade ago, you'd now be smiling at a portfolio worth over $3.4 million! So let's delve into these three powerhouses, examining their journey and potential futures.
The Nvidia Whirlwind
Nvidia is a splendid example of how investing in a solid growth stock can pay off in unexpected ways in the future. Ten years back, chatbots and Nvidia's role in pushing forward the next generation of technologies through its AI chips were still a distant dream. Today, this tech titan boasts a market cap of around $3.2 trillion. If you'd invested $10,000 in Nvidia back then, it would now be worth $2.7 million.
The past few years have seen amazing sales and profit growth for Nvidia. For its financial year ending in 2024, the company's sales breached $60.9 billion, more than triple their 2021 numbers of $16.7 billion. And the profit during that period was more than their revenue just a few years earlier!
Nvidia continues to tickle the tech world's fancy, and its solid position in the AI sector ensures that it's still a great long-term hold. Although it might not be as income-generating in the next 10 years as it was during the past decade, substantial profits can still be reaped by maintaining this stock in your investment portfolio.
Advanced Micro Devices (AMD) - A Rival with Potential
Advanced Micro Devices (AMD) is Nvidia's formidable rival, and, like its competitor, it was a top growth stock during the past decade. Investing $10,000 in AMD a decade ago would be worth more than $440,000 today.
Although AMD is significantly smaller than Nvidia, its sales have skyrocketed in recent years. Starting from around $10 billion in sales in 2020, the company reported $24.3 billion in revenue over the past four quarters.
AMD has faced some turbulence in recent months due to investor concerns regarding its ability to keep up with Nvidia and whether its AI chips can compete for significant market share. However, considering the vast opportunities that AI presents, there should be ample room for AMD to capture a share of this market - a share that isn't dependent on Nvidia's products.
While it may be a bumpier ride for AMD, it could still be a worthwhile investment right now.
Tesla - SpaceX, Soccer Fields, and Autonomous Vehicles
Rounding off this list of stellar growth stocks, we come to Tesla (TSLA). The company's reach extends beyond electric vehicles (EVs), aiming to become a significant player in AI and robotics in the future.
A decade ago, investing $10,000 in Tesla was primarily for its potential in EVs. Today, that investment would be worth about $290,000. Over the last few years, both Tesla's sales and profits have skyrocketed. In 2020, Tesla's revenue was $31.5 billion, which has now surged to more than $97.2 billion in a mere three years. And its net income for the past four quarters is an impressive $12.7 billion.
Tesla continues to be a high-growth stock with the potential to shine for years to come. Yet, its future success hinges on its strategy outside of EVs. With increasing competition, regulatory hurdles, and maintaining its position in the market, Tesla is undoubtedly the riskiest stock on this list - but it's also one worth keeping an eye on. For now, maybe it's best to hold off on snagging some Tesla shares.
Investing in the finance sector can provide significant returns over time. For instance, if you had invested $10,000 in Nvidia, AMD, or Tesla a decade ago, your portfolio value would have significantly increased. This highlights the long-term potential of investing in growth stocks like these.
Maintaining a diversified portfolio, investing in various stocks, can help mitigate risks and maximize returns, as the performance of individual stocks can be unpredictable in the short term. However, over an extended period, a few successful investments can compensate for less impressive performances in other areas of the portfolio.
