How Nvidia Stock Finally Paid Off for Long-Time Shareholders | The Motley Fool

The story of Nvidia‘s (NVDA 3.32%) ascent to become the most valuable stock in the world has dominated headlines for the past several years. But what many investors may not realize is that the tech stock went for most of its history with much more modest returns — and without any outside assurance that Nvidia stock would eventually prove to be the huge moneymaker that it has become today.

In this second article in the Nvidia series for the Voyager Portfolio, you’ll get a closer look into the company’s financial evolution over time. As you’ll see, there were long periods during which steady revenue growth failed to generate visible profits, testing the discipline of even the most experienced long-term investors.

The initial growth phase for Nvidia

Prior to the 1999 launch of its GeForce 256 graphics processing unit (GPU), Nvidia’s revenue was modest. However, between the 1999 and 2003 fiscal years, sales soared by 12 times to $1.91 billion, and Nvidia posted a profit of $91 million. Those numbers continued to climb over the course of the decade, hitting a high of $4.1 billion in sales and nearly $800 million in profit in fiscal 2008.

However, Nvidia went through two painful years of retrenchment in the aftermath of the financial crisis. Sales declined even as research and development costs grew, resulting in Nvidia losing money in both 2009 and 2010. And even once the company got back on track, it…