The notion that an investor can turn $10,000 into $1 million without a very long investment period will certainly raise a lot of eyebrows. However, many high-growth stocks have turned a $10,000 investment into $1 million.
Let’s start by moving through the common rule of thumb known as the rule of 72. It states that you should expect an investment to double by dividing 72 by the expected rate of annual return. An investment returning 72% would double in a year, 36% in two years, and so on.
Those are uncommonly strong annual returns to be sure. Most investors would be very lucky to double a $10,000 investment in a year.
Ideas like those make many investors lose hope that exceptionally high returns or even possible. They aren’t. The first stock we are going to discuss below has provided 175% returns in 2024 alone. It doubles every 0.4 years if it is to continue that current trajectory.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) stock is an example of one equity that has the potential to turn $10,000 into $1 million.
The cat’s out of the bag so to speak and it’ll be much more difficult for Nvidia to grow at the rate it has over the past decade into the future. As an example, $1,000 invested into Nvidia 10 years ago would have grown into roughly $229,000 today.
The arbitrary $10,000 figure we’ve chosen would have grown into $2.29 million today. As I mentioned above, Nvidia has increased in value by $175% year to date. A $10,000 investment made on New Year’s Day would have grown to a value of $27,500.
Back then, Nvidia’s market capitalization was approximately $1.22 trillion. It’s currently the most valuable company on Earth as measured by market cap with a value of $3.3 trillion. Growth will undoubtedly be harder to come by. That said, Nvidia still appears to be a generational opportunity due to AI. it may be necessary to simply recognize that old standards for valuation are simply no longer valid due to the emergence of AI.
Eli Lilly (LLY)
$10,000 invested into Eli Lilly (NYSE:LLY) stock would have grown into $19,614 over the last year and $66,850 over 5 years.
That’s a far cry from growing $10,000 into $1 million. That said, Eli Lilly is still going to be one of the best high-growth opportunities for investors seeking extraordinarily strong returns. Everyone is hyped up about the company because of the strength of Ozempic and Zepbound. While those drugs are remarkable in their own right, Eli Lilly is much more than a weight loss drug stock alone.
Consider also that Eli Lilly is strongly positioned to receive FDA approval for its Alzheimer’s drug, donanemab. Think about that for a minute: Eli Lilly is the leading weight loss pharma in a category that didn’t exist until very recently and also has a legitimate shot to win in the emerging Alzheimer’s space. With enough time, $10,000 invested into Eli Lilly legitimately has a chance to grow into $1 million just like other high-growth stocks would.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) stock has the potential to turn a $10,000 investment into something much bigger in a short amount of time. Whether that’s $1 million remains to be seen.
Here’s the important part I want investors to understand when it comes to AMD: The company is going to be fundamentally much stronger in the next few years due to AI. Demand for AMD chips is going to spur rapid growth in the 20% range in each of the next few years. That is going to take AMD and change it from a company that has suffered two straight years of earnings declines in 2022 and 2023, and transform it into one with strong earnings growth. Pair that strong earnings growth with strong top-line growth and it’s likely that share prices will continue to grow quickly.
Everyone knows that AMD continues to play second fiddle to Nvidia in the symphony of high-growth stocks. There’s no way to tell when or if AMD will compete on Nvidia’s level. But there is plenty of room for AMD shares to grow from the simple perspective that its market cap is roughly $250 billion at the moment. If it were to grow to $1 trillion, that would require a quadrupling of share price. AMD’s path to $1 trillion may end up being easier than Nvidia’s path to $4 trillion.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.