The current obsession with ‘long-term investing’ is, of course, a charming fiction. Humans, alas, possess remarkably short memories, and even shorter tolerances for inconvenience. Yet, even the most seasoned speculator finds their composure tested by the whims of fortune. Nvidia, that purveyor of silicon dreams, provides a rather diverting case study.
Five years ago, the company, while perfectly respectable, derived the majority of its income from the frivolous pursuit of gaming. It commenced 2021 with a distinctly ungraceful stumble – a 24% decline prompted by whispers of a ‘shortage’ of graphical processing units. One might have thought it a signal to retreat to more sensible investments. How very predictable, and therefore, how very wrong.
Nvidia, with a boldness that borders on the audacious, reported quarterly revenues of $5 billion. It defied the naysayers, ascending a full 125% during that year. A temporary triumph, naturally. The market, you see, is seldom content to allow sustained joy. A period of rampant inflation and economic sluggishness descended, and Nvidia, along with everything else, experienced a rather undignified plunge of 66%. One begins to suspect the entire exercise is designed to test our capacity for stoicism.
Today, Nvidia is…altered. The data center segment, fueled by the current mania for ‘artificial intelligence’ – a term I use with a certain amount of skepticism – now dominates its revenue stream. The third quarter alone witnessed revenues exceeding $51 billion – a sum ten times greater than the company’s total earnings from five years prior. A staggering transformation, though one wonders if it’s built on substance or merely on the shifting sands of public fancy.
Management forecasts a further increase to $65 billion in the next quarter – a growth of 65%. The story, it seems, continues. Nvidia’s investors have learned a valuable lesson: volatility is merely an inconvenience to those with sufficient patience. A mere $100 invested five years ago would now yield $1,479 – a gain of 1,380%. A fortunate outcome, undoubtedly. Though to suggest such results are predictable would be a most egregious exaggeration.
One cannot foresee the future, only observe the present. The current enthusiasm for AI may prove to be a fleeting infatuation. But, as always, those who endure the turbulence are occasionally rewarded with a most unexpected bloom. The market, after all, is a fickle mistress, and fortune favors the persistent, if not always the wise.
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2026-01-31 11:13