Nvidia (NASDAQ:NVDA) has emerged as the biggest beneficiary of the generative AI boom that started with the launch of ChatGPT in November 2022. Since the AI tool's launch, the stock has surged over 900%, rewarding investors who got in early.
In July, an investor on Reddit shared how he got in early on Nvidia, turning an initial investment of $36,352 into more than $1 million in profits by patiently holding the stock for eight years.
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The investor said that he began buying Nvidia shares back in 2017 because he believed the company's graphics processing units would be used for mining cryptocurrencies. Bitcoin hit $20,000 for the first time that year, but soon "collapsed," introducing the Redditor to the volatility of the crypto world, he said. However, he did not sell Nvidia because he believed crypto was in its "early adoption stage."
From Crypto to Electric Vehicles
The Redditor said he kept slowly adding to his Nvidia stake over the next couple of years, and by 2019, he owned about 6,000 shares of the company. In 2019 and 2020, the investor began to feel that Nvidia GPUs were not as closely tied to the crypto industry as once thought. However, there was a new reason for him to keep holding Nvidia in his portfolio.
"The hype around Tesla was growing and crypto mining started moving away from personal computers and I learned GPUs were falling out of favor for more powerful ASIC mining rigs," he said. "So my mentality moved from crypto to electric vehicles."
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‘Temptation' to Sell
Then came 2023, and the world started to see the impact of generative AI, thanks to the launch of ChatGPT in the previous year. The Redditor said he started seeing "mainstream use cases" for AI because he worked in the photography and videography industry.
The investor said his portfolio started to "skyrocket" because of Nvidia. His position in the chip maker was up 4000% and the "temptation" to sell was growing.
"Once a liability, Nvidia now made up 10%, 20%, and 30% of my entire investment account and retirement funds," he wrote. "There were days when I would log in to see I had made $100,000 that day and a week later it would swing down -$105,000. It was pretty crazy to see a full year's worth of income bouncing around day by day in my account."
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In June 2024, when Nvidia hit its all-time high of $130, the Redditor's stake in the company showed $800,000 in total profits. That's when he set a goal to sell his entire stake once his gains reached $1 million. His moment came this past July when Nvidia reached its new all-time high of $160. The investor decided to liquidate his position and make his "dream come true," he said.
"Steady hands win the race. I sold a lot of stock during the Covid crash and that was a huge mistake. Lesson learned," the Redditor added.
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