Since David Gardner’s initial Nvidia (NVDA 3.56%) recommendation on April 15, 2005, a passive S&P 500 index investor could have enjoyed a 726% return simply by reinvesting dividends.

But that 2005 rec, now Stock Advisor‘s all-time top performer, leaves the market in the dust with a return of 107,479% as of this writing.

That is not a typo. Nvidia is the first Stock Advisor pick to grow more than 1,000 times in value!

While it’s easy to highlight a winner, the real challenge was having the patience to hold Nvidia shares through every bout of uncertainty over the years.

What lessons could we learn from the most successful outlier in our flagship service? Quite a few. Despite its impressive returns, holding onto Nvidia wasn’t a walk in the park.

Let’s explore what it truly takes to achieve a 1,000x return.

At a Glance

The Good

A Stock That Has Doubled 10 Times

The Rule of 72 is a simple way to estimate how long it takes for an investment to double. If a stock grows 9% a year, roughly the historical return of the stock market, it would take eight years (72 / 9) to double an investment.

Now, imagine your favorite stocks are horses running a race around a track. Each time they complete a lap, they double in value. Knowing that the stock market as a whole might take nearly a decade to double, which horses would you bet on?

In this race, the horses don’t stop running, and you can choose to back those clearly leading the pack — including Nvidia, which has now finished 10 laps of doubling since 2005, with 9 of those laps taking 2.5 years or less.

Many investors might have hesitated to buy Nvidia, waiting for a pullback after seeing it double time and again. However, those who waited often found themselves still sidelined, missing out on its phenomenal growth.

Anchoring to past prices is common, but in this endless race, wouldn’t you prefer to back the horse consistently lapping the field? As David Gardner wisely notes, five harmful words for investors are, “I guess I missed it.”

The next doubling for Nvidia would require another $4 trillion in value, a feat that might not seem as far-fetched in the future.

Excluding PetroChina‘s brief brush with a trillion-dollar valuation in 2007, Apple (AAPL 0.45%) founded the trillion-dollar club in August 2018 before reaching the $2 trillion and $3 trillion thresholds in 2020 and 2023, respectively. Nvidia broke the $4 trillion barrier earlier in July, with Microsoft (MSFT 2.18%) joining on Wednesday.

There’s no guarantee that Nvidia will ever get to $8 trillion or $16 trillion — let alone get there first — but it does have the inside lane.

More Years of Doubling Than Down Years

One fun stat I’ve stumbled upon while following Nvidia comes courtesy of 1stock1.com, a website listing calendar-year returns as well as pre-split pricing (which I’ll mention again later). Including the partial year of its 1999 IPO, Nvidia has enjoyed 10 calendar years with gains of 100% or more, while the stock fell by any amount in only 7 years so far.

Nvidia isn’t unique in this category — Shopify (SHOP 5.56%) and The Trade Desk (TTD 4.31%) share the same distinction of having more years of 100% gains than of losses for now — but it’s noteworthy.

The Winner Outweighing All the Losers

Stock Advisor members have access to our complete scorecard, where each recommendation is tracked against the S&P 500 from the time it’s selected until it’s sold (or held through today). With two stock picks each month since 2002, we’ve seen hundreds of winners and losers along the way.

Data Source: The Motley Fool. Returns as of July 29, 2025. Graphic: Rik Silverman.

This graphic illustrates the returns of all 562 Stock Advisor recommendations relative to their S&P 500 benchmark. David’s April 2005 Nvidia selection leads with more than 106,000 percentage points of outperformance above the market’s 726% return in the same period.

Not all underperformers lost value; some, like FedEx‘s (FDX 0.15%) 403% gain since 2003, underwhelmed compared to the S&P’s 959% over the same time frame.

One standout like Nvidia can outweigh all the underperformers in Stock Advisor‘s storied history. David’s 2009 Nvidia rerecommendation, along with two long-standing Netflix (NFLX 1.05%) recommendations, further highlights this point. But it gets better: The gain on the initial rec since April 15, 2025 — the compounding just after the 20th anniversary — nearly makes up for the hundreds of losing stock picks over the years.

Nvidia exemplifies the Foolish principle of holding winners and not selling too early. Yet its journey wasn’t always smooth. A stock that seems today to be taking a long victory lap once appeared to be slowly circling the drain.

The Bad

The Stock That Plummeted 85%

Imagine a stock falling 80%. It might invoke thoughts of high-growth investments facing challenges or an unfavorable interest rate climate, perhaps echoing bad memories of 2021 or 2022.

If you remember the 2000s, you might recall that something big happened in the market before the end of the decade. The first Nvidia rec quintupled by 2007 only to lose all those gains in mere months.

Data Source: Yahoo Finance. Returns as of July 29, 2025. Graphic: Rik Silverman.

If it needs to be repeated, this is a chapter in the greatest stock story of the last 20 years.

The 85% plummet was the steepest for Nvidia shares since 2005, but seeing it trade significantly below previous highs was common for shareholders over the last 20-odd years. On average, Nvidia spent its time on our scorecard 34% below its then-highs. If we count days on which the stock closed more than 20% below its historic high price, Nvidia was in its own bear market more than 59% of the time!

Let that marinate for a moment. We all wish for a time machine so we could go back and buy Nvidia stock decades in the past. But if you had owned shares at that time, would you honestly have held through to today? After all, the discomfort wasn’t limited to the sharp pangs of these low points. There was also a dull pain that lasted for years.

The Lost Decade

On October 17, 2007, Nvidia closed at an all-time high. The next day, shares declined, and the record high was not reset until May 15, 2016.

There’s a reason the Fool encourages investors to hold stocks for five years or more. Periods of volatility or apparent mispricing can persist much longer than most investors (and all traders) are willing to wait. Could you sit on your hands while a stock was 85% underwater after six months or 50% in the red after the better part of a decade, waiting like a good Foolish investor should?

And after all of those years waiting to break even, would you cut ties as soon as shares rose in spring 2016 back to prices of more than eight years earlier? If that sounds like something you might have done, I have some bad news.

Guess which Fool rec was the best-performing stock in the entire S&P 500 in 2016? That would be Nvidia, of course, the dog many investors sold along the way. It gained 227% that year, before David recommended it for a third time in January 2017.

The Ugly

Holding Leads to Portfolio Concentration

Nothing is quite as unpleasant as several years of dismal returns, but what differentiates Foolish investing outcomes is often a willingness to sit in your own discomfort and build the long-term-investor mindset when the short run looks bleak. That involves challenging conventional wisdom.

I suspect most investors wouldn’t believe the following:

• A large cap worth $40 billion in 2016 could grow 100x in the next nine years.
• A mega cap worth $400 billion in 2022 could grow 10x in just three years.
• An investor who sold at the 2007 peak and who successfully avoided the 85% drop would have missed out on 17,660% gains if they stayed on the sidelines.
• An investor who locked in gains by selling half their position when Nvidia first doubled and stayed in with “house money” has now given up 54,689% of the gains they could have earned.

The greatest mistake we make as investors is selling our winners too early. The opportunity cost of those mistakes compounds over time as well, but that doesn’t mean you should never sell. While the pullback in Nvidia’s stock price during the great financial crisis was much deeper from prior highs than any drop since, relatively smaller recent drawdowns had much larger dollar impacts for anyone who has held many years.

The 37% pullback between January and April meant that the earliest Nvidia rec dropped from being a 910-bagger to a 574-bagger, temporarily losing 336 times an original investment. We know now that Nvidia went on to greater heights within months, but a concentrated position without any allocation guardrails would have become a major risk.

You have more flexibility to set your own sleep number and trim overweight positions than the Stock Advisor team has on our scorecard. It’s possible that we could someday keep Nvidia as a high-conviction buy recommendation while at the same time closing one or two of the active recs as a reminder of prudent portfolio management rather than as a statement of near-term outlooks or overvaluation.

The Thesis Had to Evolve

In the 1990s, our Chief Rule Breaker actually rooted against Nvidia, seeing it as a rival to his preferred video game graphics card company, 3Dfx. By 2005, Nvidia had acquired 3Dfx, and David’s investment thesis focused on Nvidia’s growth potential with Microsoft’s Xbox and Motorola (MSI 0.77%) cellphones.

Cloud computing and data centers, now Nvidia’s largest business segment, were nonexistent. Cryptocurrency mining hadn’t been invented yet, and artificial intelligence was absent from the original vision. Even CEO Jensen Huang’s enduring leadership wasn’t part of David’s initial analysis.

While some investment theses remain straightforward — perhaps selling more shoes or opening more coffee shops — the biggest winners have a quality we call optionality. You might foresee that an online bookseller like Amazon (AMZN -1.42%) could become “the everything store” or that Netflix could pivot from mailed DVDs to video streaming. It’s crucial to look ahead, acknowledging that successful investments might differ greatly from their original business models. But reevaluating your understanding of your investments is easier said than done, and it might take some extra homework to stay comfortable holding onto developing winners.

The Penny Stock That Wasn’t

Nvidia’s 2005 cost basis on our scorecard is just $0.16, at least until it’s adjusted further lower due to dividends or future stock splits. One of the biggest mistakes new investors often make is to see data like this and presume the only place to hunt for multibaggers is among penny stocks.

The reason for that misdirection is stock splits. Nvidia has never traded in penny-stock territory since 2005 due to four splits:

• April 2006: 2-for-1 split
• September 2007: 3-for-2 split
• July 2021: 4-for-1 split
• June 2024: 10-for-1 split

If you followed the April 2005 recommendation, an investment of less than $20 per share would now translate to 120 shares for every 1 held since then. Without these splits, that single share would today be worth above $21,000. Nvidia would have the same market cap but far fewer shares outstanding.

While fractional shares weren’t available back then, today’s investors can buy partial shares of many companies through their broker for as little as $5. For the same dollar amount invested, I’d rather own a fraction of a strong business like Nvidia than thousands of shares of a failing one trading over the counter for pennies.

The Foolish Bottom Line

Nvidia has been a mainstay on Stock Advisor‘s Foundational Stocks list since 2022 and is likely to remain a Fool favorite for years to come. If you don’t own shares directly, know that almost $8 out of every $100 invested in an S&P index fund is tied to Nvidia, its largest weight today. And those who have followed our recommendation for years might own more than enough already, which shifts the question of whether to buy to when to pare down an oversize position in the years ahead. (That’s how I’m thinking through the 70x gains on the first block of shares I bought in 2017.)

As I wrote above, there’s no guarantee Nvidia will continue to be the market darling it has been for so long. But if there’s one idea I would take to the bank — one premise I’m nearly certain about — it’s that Nvidia isn’t done teaching Fools lessons about long-term thinking that will pay dividends across all the other investments we consider on our investing journeys.

If you haven’t held Nvidia since 2005, it’s not too late to collect a small slice of one of the highest-quality businesses in the world. And if you have… take that victory lap. You’ve earned it.

Further Reading

*Accessible to Motley Fool Stock Advisor members.

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