Backtest: Buy and Hold NVDA (NVIDIA Corporation)

This analysis evaluates a buy-and-hold strategy over the past 26 years, providing a historical perspective on NVDA's performance from 1999-01-22 to 2025-07-03.

Note: This simulation uses adjusted close prices, meaning all historical prices have been retroactively adjusted for splits and dividends. To achieve similar results in practice, you would need to reinvest all dividends automatically as they are paid.

Performance Overview

Starting with an initial capital of $10,000.00, we purchased shares of NVDA on 1999-01-22, at a price of $0.04 per share (adjusted for splits and dividends). No trading, no adjustments — just a simple buy-and-hold approach.

We held the position continuously through every market twist and turn, never selling. As of 2025-07-03, the price of NVDA had risen to $159.34. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $42,367,408.60 — a total gain of 423,574.09%.

This translates into an annualized return of 37.14% over the entire period. The return is outstanding and far exceeds typical market returns. Such performance usually reflects an unusually favorable period or a high-risk, high-reward asset.

Drawdown and Risk

The maximum drawdown recorded during this period was 89.72%. This drawdown began after a peak price of $0.55 on 2002-01-03, and reached its lowest point on 2002-10-09 when the price fell to $0.06. The drawdown lasted for 279 days.

The drawdown was very large, indicating high sensitivity to adverse market conditions. Strategies with this profile may offer strong upside but require enduring deep declines. The maximum drawdown lasted over six months, suggesting a sustained downturn or persistent volatility. These periods can shake investor confidence and demand discipline.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.41, reflecting the tradeoff between return and volatility.

A moderate return-to-risk profile. The strategy handled risk reasonably well while delivering decent returns.