Long-term investing offers a path to incredible wealth generation. Even if other stocks in your portfolio wind up being complete duds, owning just a small handful of big winners through the years can be enough to deliver life-changing returns.?
With that in mind, read on for a look at two stocks that could have turned $10,000 into more than $1.5 million if you held on to them for 20 years.?
Netflix turned $10,000 into more than $1.5 million
If you invested $10,000 in Netflix and held on to your position over the last 20 years, your holdings would now be worth over $1,585,000. When Netflix (NFLX -2.54%) went public in 2002, few could have imagined how massively influential and successful it would go on to become. Its competitors were clearly caught off guard.
At the time, Blockbuster was still top dog in the video-rental space. The former rental leader famously turned down a chance to buy out Netflix for $50 million. Today, the company has a market capitalization of $168 billion, and Blockbuster is defunct.??
While Netflix started out as a mail-based video rental platform, it was the pivot to streaming video that ultimately drove incredible success for the business and delivered incredible returns for shareholders.?
Netflix pioneered the subscription-streaming revolution, and its sales and earnings skyrocketed as adoption for the new distribution model took hold. The company now has over 238 million subscribers worldwide, and it's delivered life-changing returns for its long-term shareholders.?
But even though Netflix has put up incredible returns over the last two decades, the stock is actually down big from its lifetime high. The company's share price is off roughly 45% from the peak that it hit amid a surge of pandemic-driven engagement and strong bullish momentum for growth stocks in November 2021.??
Nvidia turned $10,000 into nearly $3 million
Nvidia (NVDA -2.68%) went public in 1999 -- the same year that it debuted the world's first graphics processing unit (GPU). Admittedly, the GeForce 256 wasn't the first graphics card, but it did have the distinction of being the first to put the processing hardware on a single chip.?
Early in the company's history, Nvidia's unusually powerful processors were used almost exclusively to run graphically intensive PC games. Growth for the gaming industry helped the company record impressive sales and earnings performance, but it was the push into data centers that kicked off a revolution and transformed the business.?
Because GPUs perform much better than other processors for some computationally intensive tasks, Nvidia saw a surge in demand in conjunction with the rise of cloud computing.
In 2022, the company's data center segment finally overtook the gaming segment to become its biggest sales generator. This year, the company has seen explosive growth powered by demand for processors capable of running advanced artificial intelligence (AI) software.?
Nvidia is up 187% in 2023 alone, and it now has a market capitalization of roughly $1.03 trillion and ranks as the world's sixth-largest company.
With the benefit of hindsight, making a buy-and-hold investment in Nvidia stock 20 years ago would have been one of smartest investing plays you could have made. Gains of more than 29,730% over the last two decades mean that a $10,000 investment in the stock would now be worth approximately $2,983,000.
What do these incredible stocks have in common?
At first glance, Netflix and Nvidia might not look particularly similar -- but there are shared threads running through both of their world-beating success stories. Both companies leveraged strong foundations in order to branch into new product and service categories that wound up powering incredible growth.
Thanks to excellent leadership and high-level execution, Netflix and Nvidia were able to capitalize on emerging opportunities, shape entire industries, and make their shareholders rich.
Identifying companies with that kind of explosive potential is no easy task, but long-term investors really only need one win of that magnitude to score life-changing returns.?