NVDA vs VOO

#What this plan actually returned

These are real results, not estimates. We ran $10,000 up front plus $500 a month from September 9, 2016 to September 9, 2026 (10.0 years), with dividends reinvested, against actual daily closing prices for each fund.

#Reading the result

The gap is not close. NVDA turned $70,000 of contributions into roughly $3 million, an annualized return near 64 percent, while VOO produced about $178,000. Compounded over a decade, that difference is close to seventeenfold.

Numbers this extreme are best treated as a description of one historical path rather than as evidence about strategy. NVIDIA went from a graphics card company to the primary supplier of the hardware underpinning the AI buildout, a transition few people forecast in 2016 and fewer still would have held through. The result in the table is real. It is also the single most favorable single-stock outcome available in the US market over this window, which is precisely why it was chosen for a comparison page and precisely why you should discount it.

#The survivorship problem, stated plainly

This page exists because NVDA won. Nobody builds a comparison page for the semiconductor company that stagnated, and no reader searches for one. That selection happens before the backtest runs, and no amount of accurate calculation afterward corrects for it.

The honest version of the question is not “what would buying NVDA have returned?” It is “what would buying the stock I would actually have picked in 2016 have returned?” That set includes the companies that were far more obvious choices at the time and went nowhere. The companion page comparing NVDA against Intel makes the point concretely: in 2015 Intel was the larger, more established, more widely recommended semiconductor company.

#The drawdown column is the part worth studying

NVDA’s worst decline in this window was about 66 percent, from November 29, 2021 to October 14, 2022, roughly eleven months. VOO’s was about 34 percent, over five weeks in early 2020.

Sit with the NVDA number for a moment, because it is the real content of this page. Losing two thirds of a position over the better part of a year is the experience that stands between an investor and the headline return. Most people who owned NVDA in 2021 did not own it in October 2022. The return in the table is available only to someone who held through that decline and kept contributing into it, which is a much rarer behavior than picking the right stock in the first place.

Note also that this 66 percent drawdown happened well into the run, after large gains had already accumulated. A percentage decline late in a compounding sequence destroys far more dollars than the same percentage early on, which is the core of sequence of returns risk.

#What concentration actually costs

VOOspreads your contributions across roughly 500 companies. If any one of them fails outright, the effect on your balance is small, and the index mechanically replaces it. You are guaranteed never to dramatically beat the market, and equally guaranteed never to be wiped out by a single company’s failure.

NVDA is one company, in one industry, exposed to a specific set of risks: customer concentration among a handful of large buyers, competition from both established chipmakers and its own customers designing in-house silicon, export controls on advanced semiconductors, and a valuation that requires sustained extraordinary growth to justify. None of these risks appear in a backtest, because a backtest only reports the path that happened.

The distribution matters more than the mean here. Across all individual US stocks over long horizons, the median outcome has historically been considerably worse than the index, with overall market returns driven by a small minority of extreme winners. NVDA is one of those winners. Selecting it in advance, and holding it through a 66 percent decline, is the part that cannot be backtested.

#What to test

• →Run NVDA with a window ending in October 2022 rather than today. The same stock, the same plan, a very different conclusion.
• →Add a few semiconductor peers you would plausibly have considered in 2016 and see the range of outcomes rather than only the best one.
• →Try a blended approach: mostly VOO with a small single-stock position, which is closer to what most people actually do than an all-or-nothing choice.
• →Compare the drawdown columns before comparing the return columns.