Credits: Canva
By: Aquib Nawab
Finance
In the world of investing, the idea of turning a modest $5,000 investment into more than $1 million over 20 years might seem like a distant dream. However, the stories of two companies, Nvidia and Apple, demonstrate that such remarkable growth is indeed achievable.
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Nvidia has made a remarkable impact in the tech industry. The soaring demand for Nvidia's chips, driven by AI and generative AI applications like ChatGPT, has been a key factor. Notably, Nvidia holds a dominant 80% share in the AI chip market.
Credits: Economic Times
Revenue surged by an impressive 86% year-over-year, reaching nearly $39 billion. Earnings grew from less than $3 billion to over $17 billion, demonstrating remarkable growth.
Credits: Seeking Alpha
Analysts from Bank of America predict an additional $14 billion in revenue for Nvidia by 2027 as AI and chatbot demand rises. The company's potential for future growth remains substantial, although it's essential to note its high current valuation.
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Investors who put $5,000 into Nvidia in 2004 now see their investment worth nearly $1.6 million. While duplicating such performance may be unlikely, there are still ample growth opportunities in the AI sector.
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Apple faced near bankruptcy in the 90s, saved by a $150 million investment from Microsoft. The iPhone's introduction marked a turning point in Apple's fortunes, making it an innovative and exciting investment option. Apple's 1.5 billion active iPhone users form a substantial customer base.
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Apple achieved remarkable iPhone sales, surpassing $200 billion in the most recent fiscal year. This success persisted despite economic challenges and inflation.
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Apple's growth potential lies in its services, leveraging its vast user base for recurring revenue. Services like music, streaming, and news offer opportunities to enhance Apple's top-line growth.
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With a near-$3-trillion valuation, Apple may appear expensive, but its loyal and extensive customer base makes it an attractive long-term investment.
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