“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
A five-year holding period can produce dramatically different outcomes depending on business performance, valuation expansion, and the power of compounding. In the case of NVIDIA Corp (NASD: NVDA), the result over the past five years was extraordinary: a hypothetical $10,000 investment made on 06/24/2021 grew to $104,497.65 by 06/23/2026, assuming dividends were reinvested.
That equates to a total return of 944.89% and an average annual return of 59.89%. While NVIDIA’s dividend contributed modestly to the final result, the overwhelming driver was capital appreciation in the share price, underscoring how dominant earnings growth expectations and market re-rating can be in high-performing semiconductor names.
NVDA 5-Year Return Details
| Start date: | 06/24/2021 |
|
|||
| End date: | 06/23/2026 | ||||
| Start price/share: | $19.21 | ||||
| End price/share: | $200.04 | ||||
| Starting shares: | 520.56 | ||||
| Ending shares: | 522.34 | ||||
| Dividends reinvested/share: | $0.37 | ||||
| Total return: | 944.89% | ||||
| Average annual return: | 59.89% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $104,497.65 | ||||
The arithmetic is straightforward. A $10,000 starting investment purchased 520.56 shares at $19.21 per share. By 06/23/2026, those holdings had grown to 522.34 shares through dividend reinvestment, and the ending share price of $200.04 lifted the portfolio value above $104,000. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove the Return?
NVIDIA’s outcome over this period was driven far more by share-price appreciation than by income generation. The company has long operated at the center of several structurally important computing markets, including graphics processing, accelerated data-center workloads, and artificial intelligence infrastructure. As investor expectations for AI-related capital spending expanded, NVIDIA became one of the market’s clearest beneficiaries.
That distinction matters. For a low-yield stock such as NVDA, most long-term return depends on some combination of revenue growth, margin expansion, earnings power, and the valuation multiple the market is willing to pay. Dividend reinvestment added shares, but only marginally; the main engine of wealth creation was the move from $19.21 to $200.04 per share.
Dividend Reinvestment: Helpful, But Not the Main Story
Over the five-year period in this analysis, NVIDIA paid $0.37 per share in dividends, and those dividends were assumed to be reinvested at the closing price on each ex-dividend date. That increased the share count from 520.56 to 522.34.
For income-oriented equities, reinvestment can be a major contributor to long-run total return. In NVIDIA’s case, the dividend was too small to materially change the outcome. The lesson is not that dividends are irrelevant, but that total return should be analyzed in context: some stocks compound primarily through cash distributions, while others do so through business growth reflected in the stock price.
Current Yield and Yield on Cost
Based upon the most recent annualized dividend rate of 1/share, we calculate that NVDA has a current yield of approximately 0.50%.
Another useful measure is yield on cost, which compares the current annualized dividend with the original purchase price. Using the original cost basis of $19.21 per share, the current annualized dividend of 1/share implies a yield on cost of 2.60%.
Key Takeaways
- Initial investment: $10,000.00
- Ending value after five years: $104,497.65
- Total return: 944.89%
- Average annual return: 59.89%
- Primary driver of performance: capital appreciation, not dividend income
This five-year NVDA return illustrates how exceptional business momentum can overwhelm the contribution from dividends in a total return framework. It also highlights why long holding periods can produce outsized results when strong operating performance aligns with expanding investor conviction.
“Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain.” — Bill Miller
