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Steve Eisman is one of the investors who predicted the financial collapse of 2008 and profited via a strategy known as “the Big Short,” where he bet against subprime mortgages. That’s why so many follow his market moves, and it just so happens he’s a big fan of tech stocks like Nvidia. Why? Calculating what your shares would be worth today if you invested $2,500 in Nvidia 10 years ago would explain everything.
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Today, Eisman is a senior portfolio manager at Neuberger Berman. In a recent appearance on Bloomberg Television, Eisman expanded on his belief that the tech sector is set for sustained growth due to continued consumer demand for innovations like phone apps and AI enhancements in computing. He told Bloomberg that this demand is spurring “the biggest refresh cycle in history.”
He believes this cycle means “You have to own the big, large-cap, tech stocks” such as Microsoft, Oracle, and Nvidia. Eisman also volunteered that he owns “a lot” of Nvidia. Nvidia (Nasdaq: NVDA) is one of the world’s leading providers of graphics processing units (GPUs), important components in gaming computers that enhance the player experience. GPUs have recently become essential in AI development because they can be used as semiconductors.
In addition to this crossover usage in semiconductors, Nvidia is expanding the use of their GPUs into data center applications. This is due to Nvidia GPUs’ ability to handle heavy workloads and complex tasks. As computer gaming, data centers, cloud storage, and other digital information solutions increase in complexity, their dependence on GPUs will only grow.
All these potential applications for Nvidia GPUs have created a perfect environment for Nvidia’s stock to surge. Since the third quarter of 2023, Nvidia’s stock has recently closed at $129.24. Nvidia’s current market cap is estimated at a massive $3.2 trillion, and heavy hitters like Eisman think there is still room for more growth.
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Perhaps the most amazing aspect of Nvidia’s bull run is that it was trading for around $0.47 per share in July 2014. Here is what your shares would be worth if you’d bought $2,500 worth of Nvidia shares in July 2014. A $2,500 investment would have bought you 5,319 shares of Nvidia stock. If you’d held on to your shares, they would be worth $687,446.80 today.
That’s a substantial profit for an initial investment that wasn’t much larger than one year’s lease payments for a new car. No wonder Steven Eisman is such a big fan of Nvidia. The good news is that opportunities like Nvidia still exist even if you can’t get Nvidia for pennies on the dollar anymore. It shows that great things can come from small beginnings, even when it comes to investment portfolios.
It’s also worth noting that Nvidia does not exist alone in the marketplace. The more successful a company like Nvidia is, the more competitors it will draw. Despite Nvidia’s recent boom, regulatory changes, market conditions, or other unforeseen challenges could stop its momentum or cause its stock price to fall.
Disclosure: Estimated dividends and share prices fluctuate daily. There may be some variance between the current and estimates when this article was written.
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This article Big Short Investor Loves This Tech Stock. Here’s How Much You’d Have If You Bought $2,500 Of Nvidia Ten Years Ago originally appeared on Benzinga.com
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