If You'd Invested $10 Million in Nvidia Stock 10 Years Ago, Here's the Shocking Amount You'd Have Today

Some of the world’s best investors run concentrated portfolios. That is, they put huge amounts of money into a small number of stocks. This way, most of their money is invested in their top few ideas rather than their 10th-best idea.

While few people have $10 million to invest, it’s fascinating to see how a massive bet on a single winning stock can transform a person’s life. Diversification is important, but the illustration below demonstrates just how powerful it can be to stick with your best investment ideas.

Nvidia stock would have transformed $10 million into an outrageous amount

Nvidia (NVDA 1.06%) has been one of the best-performing stocks of the last decade. That’s due mainly to its position as a leading artificial intelligence (AI) stock. With AI spending rapidly on the rise, Nvidia’s business model has directly benefited from the sale of its leading graphics processing units (GPUs): critical components required for training and deploying complex AI models.

Over the last 10 years, Nvidia stock has risen by roughly 24,000%. A $10 million investment, therefore, would now be worth around $2.4 billion. Even a smaller investment of $1,000 would now be valued at more than $240,000.

This doesn’t mean that you should bet all your money on a single stock. Most people are best off investing in a broad market index like the S&P 500, which grants you valuable diversification benefits. But if you’re looking for maximum growth, why spread your money across your 15th, or even your 10th-best idea? If you have high conviction on a stock like Nvidia, consider making a bigger bet than usual.

Just don’t invest more than you can afford to lose if you opt to run a concentrated portfolio.